Staking and Neutrality in Blockchain

Research Question: Discussion Points
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Institutional Affiliation
Research Question: Discussion Points
Staking as a service and regulatory oversight of blockchains
In the cryptocurrency assets market, staking as a service (StaaS) is a growing phenomenon with the increasing popularity of decentralized networks that are purely based on the proof-of-stake consensus. This raises regulatory and legal questions about the nature of the business models of blockchains. Blockchain decentralized networks depend on the achievement of consensus, or a mechanism that enables the verification of transactions that are executed on the blockchain without necessarily requiring a designated intermediary. However, these networks are designed to ensure the security of the investors’ money. Proof of work (PoW) has for a long time been the standard of achieving consensus but has proved to be power-intensive. For this reason, there has been a possibility that the European Parliament would propose a ban on the use of PoW through the Crypto-assets Regulation (Werner, 2022). PoS consensus is an alternative to PoW and is an ecological solution that ensures the participation of investors in the consensus protocol. However, as Valkenburg (2022) explains, stakers and PoW miners do the same verifiable economic sacrifice to participate in the validation of the consensus data and create the reward in the validation. Exchanges and other custodians may issue security in a similar way that banks offer interest on deposits. However, courts have realized that interest-bearing accounts fall out of the required security issuance tests since the risk to bank customers is reduced by federal deposit insurance and banking regulations (Valkenburg, 2022). In this case, cryptocurrency exchanges, which are not federally insured and chartered banks cannot depend on the same defense.
Net neutrality and blockchain validation
While cloud-delivery networks have the potential of improving the scalability of blockchains, Kuzm...