I don't understand this viewpoint on a couple levels. First, although it's not a perfect comparison, I liken passive staking rewards to a dividend of sorts. Investors can make money off of trading, dividends, or share appreciation (and probably a bunch of other ways I'm not an educated enough investor to know about.) Even with pure staking, investors are looking at what, maybe a 6-8% ROI a year? That won't wake them up or justify the risk. Investors are absolutely here for price appreciation, not dividends, so on that merit alone it's not like the rewards pool is the only way for people to earn with their stake.

I feel like the proposed staking system could actually be worse ROI for passive investors. Under this pure staking system, a passive investor would probably have a harder time outperforming inflation than currently. The current percentage of inflation dedicated to staking rewards, combined with payouts that can be achieved from passively delegating to reputable curation projects or dApp communities can often outpace the inflation rate.

I'm sure lots of Hive power isn't used optimally at present. I wonder if anyone could figure those numbers out... Every inactive account with Hive power sitting in it, every time a user sits at 100% voting power for a few hours or a day... those all create the edges that active users profit from. As soon as pure staking is switched on, everyone is playing optimal game theory. Many more Hive tokens start flowing to accounts with lost keys, or users who were here for the boom and left tokens parked that they'll never come back to, or probably only to sell off if they do revisit. Right now all those folks are the bread and butter. They're the people who pay the gym membership but never go, thereby making it a lot better for the people who do!

Particularly with potentially shorter power down times in the mix alongside these beefier staking rewards, I'm sure we'd see lots more Hive powered up too. Another example of the "gym rat" Hive power holders benefitting from lots of liquid Hive that could easily disappear under other conditions. I think it would be very close that the amount of liquid Hive on site and on exchanges would just about offset the percentage of inflation going to witnesses and the HPS, making pure staking rewards very close to breakeven with the inflation rate. Right now, effort allows small accounts and big investors alike to drastically outperform their holdings and achieve radically higher returns on investment. This pure staking system works a long way toward negating that.

If everyone just wants to put in $1000 for 1000 tokens, and get 1100 tokens back in a year... that still have a value of $1000 because all the new tokens are inflation... it just makes no sense to me. Price appreciation of the token and adding value to the network is the only path to profit, not staking dividends. And if price appreciation is only achieved by luring investors in with the promise of big staking rewards... then it really does bring on a Ponzi type structure.