Electra: Issuance Curve Adjustment Proposal

Thank you for the meta framework, this is a useful starting point. There will be much more to say about individual items, so I am not intending to reply fully to each of them right now. Here are questions currently on my mind, with some notes on potential approaches:

  • Assumption of “long-term staked participants” given any PoS reward curve design: Model cost structure of various types of participants (solo stakers/operators, node operators, LST holders, ETF depositors) as well as type-specific reward curves (e.g., solo staker PnL, solo operator part of fractional/DVT pool, node operator in LSP, custodial services). Combining cost structure and reward curves, we obtain type-specific supply curves. Move on to understanding the distribution effects (relative share of each type) across classes of issuance curves, as well as aggregate size of the staking set as determined by type-specific supply curves and issuance curves under consideration.
    Leading question: Is there a “macro effect” to the size of the staking set? (i.e., analyse further folk arguments that more issuance loosens everyone’s constraints and increases the relative share of certain types)
  • PoS mechanism improvements: How far can we go with changes to slashing weights/parameters of the mechanism? What else can we consider to improve internal market competitiveness, i.e., “micro effects”, “make the staking set the best it can be”? (see e.g., proposals contained in rainbow staking framework, and @OisinKyne’s earlier answer)
    Link back to “macro”: What are the impacts of such changes on the supply curve of each type of participant? Is there any reason to think these effects apply differentially given the prevailing staking ratio, i.e., is there still a “macro effect”, or are the two effects separable?
  • ETH derivatives: What are fundamental differences between “ETH on L2-derivatives” and “ETH in PoS-derivatives (LST)”? What are fundamental differences between “Re-staked ETH derivatives” and “Re-staked staking ETH derivatives”? (possible starting point for a typology of derivatives)
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