Is attestation PoS a eyewash? Dragonfly partner: Paying for network security to stake is very meme.

Attestation (PoS) and stake mechanism (staking) have been viewed as sustainable Blockchain operational mechanisms for economic integration over the past few years, enhancing network security while creating stable income for participants. However, in the eyes of Dragonfly partner Haseeb Qureshi, those 8% risk-free returns are merely an illusion to avoid asset dilution, rather than true rewards.

We asked @hosseeb of @dragonfly_xyz if he thinks the top of proof of stake is in.

“We’re probably going downhill from here.”

“Staking mania was definitely a little bit of an illusion.”

“This idea that you’re paying for security is kind of a meme.”

“This kind of economic… pic.twitter.com/vqXNBX5erp

— The Rollup (@therollupco) June 26, 2025

Unveiling the Illusion of POS: Staking Returns Are Not Profits

Haseeb mentioned in a recent podcast with The Rollup that most of the staking models in the current market are an economic illusion. Staking is viewed as a risk-free return, but in reality, it is merely a means to avoid asset dilution:

Assuming you stake with an annual yield of 8%, but the underlying asset is also inflating at 8% per year, then you are actually not making any profit, and you may even be subject to capital gains tax due to this nominal yield (nominal yield).

He emphasized that the baby boomer generation likes returns, which is why this product was created, without considering the structural flaws behind the PoS token economic design: "When the rewards from staking are only to counter inflation, rather than to create real value, it is similar to the 'high-yield junk bonds' in traditional financial markets."

A misunderstanding: "Paying for internet security" sounds very meme-like.

The core concept of PoS is: "Allow token holders to stake their assets, become validators, and enhance network security through economic incentives." However, Haseeb believes that this logic has always been untenable:

What truly determines the security of a Blockchain is the health of the software itself and the diversity of the distribution of validators or application ecosystems, rather than just a yield of 6% or 8%.

He also admitted that most of the validators on PoS chains today are almost all the same group of large professional institutions. They operate across chains and deploy at scale, effectively monopolizing the validation nodes of most networks.

We have long entered the era of professional validators, with very few home or personal nodes maintaining network security.

(Solana decentralized crisis? Validators highly rely on foundation stake support, if withdraw, could it collapse? )

This means that the act of staking itself does not make the network more secure; it simply creates a continuous profit channel for these institutions. In other words, staking has long been decoupled from security and has become an alternative mining economy.

Hardworking Ethereum ETF investors: if you don't stake, just wait to be diluted by inflation.

Haseeb also mocked many Ethereum spot ETF investors, pointing out that their inability to participate in staking means that their holdings are being "diluted" by inflation every second. This is also why many traditional financial institutions are eager to incorporate staking functionality into ETF structures:

Everyone actually knows that the profits gained from staking are not some extra rewards, but rather a way to protect oneself from the effects of token inflation as much as possible.

He stated, "The market will gradually see through this kind of economic fictitious benefit, so it will eventually come to an end."

( Ark will launch a Solana ecosystem venture capital fund! Cathie Wood: U.S. regulatory easing is key for open crypto ETF staking )

The inflation mechanism needs reform, and the definition of stake needs to be reshaped.

In response to Haseeb's criticism of the PoS model, he predicts that the next phase will be a transition period to adjust the inflation design and reduce staking rewards.

People are beginning to realize that inflation is inevitable, but it should be kept at a very low level. The role of staking should not be to tempt with returns, but to maintain the minimum operational momentum of the network.

It is not hard to imagine that in the future, the design of consensus and inflation mechanisms will gradually be re-examined, and step-by-step adjustments and corrections will give rise to a more robust and secure Blockchain ecosystem.

Is Proof of Stake a scam? Dragonfly partner: Paying for staking for network security is very meme-like. First appeared in Chain News ABMedia.