Interview with Awa Sun Yin of Cryptium Labs
Cryptium Labs is a multi-network research and engineering team. They deploy cutting-edge research to improve the capability and efficiency of distributed protocols. They envision a future Proof-of-Stake blockchain ecosystem without the externalities or limitations of Proof-of-Work, where heterogeneous blockchains serving a wide variety of application use-cases coexist and interoperate seamlessly.
SR: How do we ensure and incentivize further decentralization within the staking ecosystem?
ASY: It depends on how you define decentralization. For some, decentralization is measured by the number of distinct consensus nodes and their respective operators (people or group of people operating the node). Some ways of increasing the number of nodes is by making economic incentives more interesting for that segment of operators, as well as lowering the operational costs derived from operating a consensus node.
SR: What are the biggest challenges for Proof of Stake and Staking, that we still have to overcome or may still face?
ASY: Limited degree of decentralisation due to the initial token distribution.
SR: What do you consider to be the most important aspects to attract delegators to your staking service?
ASY: Simply operating a consensus node and offering it as a staking service to other token holders adds very little value to the network. Similarly, competing through shallow parameters, such as fees or promotions, add very little comparative advantage. What I recommend validators of all PoS networks to do to attract delegation is by pursuing tasks or activities that contribute to the community, the developer ecosystem, or the core protocol. From my experience, large and medium holders tend to choose based on what baker is most aligned with their long-term incentives – thus, choose the ones that bring most added value to the long term of the network.
SR: How can smaller Staking-as-a-Service companies differentiate themselves from large players like exchanges providing staking services (e.g. Coinbase)? Is there a danger of centralization? Binance Staking in 2019, yes or no?
ASY: I recommend smaller Staking-as-a-Service companies to pursue novel approaches to staking, primarily leveraging development tools, smart contracts, or contributing to the core protocol. For instance, in our team we are working on a few changes to the core protocol that will enable programmable staking, which allows bakers of any size to write smart contracts that implement different policies or terms of services. I believe that token holders that use services such as Coinbase or Binance are their own segment and that there will always be demand for them in the ecosystem. However, I don’t think every PoS token holder falls in the same category. The risk of centralisation exists, but I think disproportional initial token distributions have a bigger impact.
SR: Do you see the necessity to educate Delegators on Protocol Governance? Grassroots Democracy or parliamentary democracy?
ASY: Absolutely. This is what we have been doing for almost a year, ever since we started our first articles, which you can find in our official Medium blogs. See for example: https://medium.com/cryptium/a-letter-to-current-and-future-delegators-11e7dbac60b9.
SR: How do you explain Proof of Stake and Staking to a 7 years old?
ASY: You don’t, a 7 year-old should be learning fundamental things such as basic algebra.
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