A number is hanging on the Dusk website: the whole network has staked 210M DUSK, accounting for more than forty percent of the circulating supply. It looks pretty healthy. A staking ratio this high on a single chain suggests that everyone is willing to lock their tokens to support and protect it.
But I thought about it: who exactly is the money that these locked coins are earning?
@Dusk_Foundation —each day about 170,000 new tokens are minted; $DUSK
These are paid out as block rewards to the staking validators. This is their main source of income. On the same day, the actual transaction fees collected by the whole chain are 258 tokens, which is about fifteen dollars.
So the validators’ money is hardly coming from on-chain users paying for usage—it’s essentially being printed by the protocol.
That’s a bit roundabout. Staking is supposed to protect a chain that people actually use and that can generate real demand. The idea is that participants share in the value created by that chain. But #Dusk is different now: there’s almost no demand on-chain. Stakers are splitting the newly minted coins, and those newly minted coins dilute the holders who are not staking. In plain terms, it’s a group of people who lock tokens taking value from another group who didn’t lock—redistributing inflation.
This isn’t a problem unique to Dusk. Many early chains have the same issue: they buy security by issuing more tokens. The question is that this setup can only last for a while. Once day comes when block rewards run out, or when the token price drops so that the reward from minting can no longer cover the opportunity cost, stakers start to withdraw. Then the chain’s security budget must be supported by real transaction fees. But Dusk’s transaction fees of fifteen dollars per day are still far from enough to sustain itself.
So that staking rate of more than forty percent—I'm not really seeing it as a sign of confidence. It’s more like people are waiting: locking up to capture emissions on one side, while watching for the chain to eventually attract real users. If users don’t come, this loop keeps going from left hand to right.
Personal view only; not investment advice.
Do you like Dusk?
But I thought about it: who exactly is the money that these locked coins are earning?
@Dusk_Foundation —each day about 170,000 new tokens are minted; $DUSK
These are paid out as block rewards to the staking validators. This is their main source of income. On the same day, the actual transaction fees collected by the whole chain are 258 tokens, which is about fifteen dollars.
So the validators’ money is hardly coming from on-chain users paying for usage—it’s essentially being printed by the protocol.
That’s a bit roundabout. Staking is supposed to protect a chain that people actually use and that can generate real demand. The idea is that participants share in the value created by that chain. But #Dusk is different now: there’s almost no demand on-chain. Stakers are splitting the newly minted coins, and those newly minted coins dilute the holders who are not staking. In plain terms, it’s a group of people who lock tokens taking value from another group who didn’t lock—redistributing inflation.
This isn’t a problem unique to Dusk. Many early chains have the same issue: they buy security by issuing more tokens. The question is that this setup can only last for a while. Once day comes when block rewards run out, or when the token price drops so that the reward from minting can no longer cover the opportunity cost, stakers start to withdraw. Then the chain’s security budget must be supported by real transaction fees. But Dusk’s transaction fees of fifteen dollars per day are still far from enough to sustain itself.
So that staking rate of more than forty percent—I'm not really seeing it as a sign of confidence. It’s more like people are waiting: locking up to capture emissions on one side, while watching for the chain to eventually attract real users. If users don’t come, this loop keeps going from left hand to right.
Personal view only; not investment advice.
Do you like Dusk?
看好
100%
不看好
0%
1 votes • Voting closed