Imagine a "bank" 🏦 where your deposit is locked until an unspecified future date, only becoming accessible and liquid again through continuous protocol upgrades at a release rate of less than 1% per day.
At first glance, it seems implausible to find depositors or investors for such a scenario. Who would want to deposit their assets and lock them up until an uncertain future date?
Silicon Valley Bank, along with other neo-banks (operating under fractional reserve banking) that suffered from the Federal Reserve's interest rate hikes and consequently collapsed due to bank-run liquidity crunches, would be eager to learn how to achieve the above scenario of unlimited deposit lock.
In reality, not only does such a "bank" exist, but it also represents the internet of value and holds a significance comparable to the SWIFT system.
You've probably guessed it already: it's the incredible Ethereum "bank".
In the Ethereum 2.0 ecosystem, validators secure the Proof of Stake consensus mechanism by locking up ETH as collateral, known as a stake. Validators are randomly selected to attest to new blocks based on the size of their stake. They are incentivized to behave honestly to earn rewards, or they risk losing a portion of their stake.
Why are validators willing to stake? It's human nature. Their motivation goes beyond the staking rewards. It's about the hope for a better tomorrow, participating in innovation and evolution 🧬, and being willing to bear more risk and uncertainty in the process.
Komen