Vest Protocol: Staking Pools and Tokenization

Zach had an awesome talk with Axel Ericsson, a cofounder at 1protocol, focusing on providing proper incentives to both token holders and miners on blockchains. Although a work still in progress, 1protocol’s Vest system aims to allow all players to collaboratively supply work for staking protocols.

Here’s what Axel, a new Thiel Fellow, had to say:

##Staking protocols are the future

Moving away from opportunity cost to participate in a blockchain to a staking-based incentive system allows for much better alignment of values in a decentralized, trustless system. Axel believes that most systems that can be modelled as market protocols will move to staking protocols as a result.

##It will be tricky to make

Consensus protocols currently has a number of problems, such as the “nothing at stake” problem, where forgers in proof-of-stake-based blockchains don’t need to use resources to create new blocks that would be accepted by the majority of participants in the blockchain. Axel notes that a number of participants in the blockchain world have come up with some solutions to this, but acknowledges that work remains.

##Democratization of blockchain

With Vest, more people can participate in blockchain technologies without having to provide a complex computer system with redundant power supplies and redundant Internet. Axel is very excited to be working towards opening up blockchains to more of the world!

Key takeaways:

The future will be defined by staking protocols
Proof-of-stake remains a challenge, but
It promises a democratization of blockchain technology