Delegator slashing is definitely an interesting concept and would work in the direction we are seeking, but when paired with liquid staking it once again creates unexpected behaviour whenever the tez isn’t directly in your wallet but rather in some contract where you still though retain control over it. It would be very weird for example to put a bid for an NFT and then you come back to it with the bid halved in value because the contract delegated to a baker that misbehaved at some point.
Regarding whether or not to include delegation at the protocol level (in the context of lock-up), truth is that even if you do then you end up with some providers that allow you to make your tokens liquid with the help of additional structure, while regular validators only allow delegations as admitted by the protocol, so this sort of “centralizing” force is still present. This is not speculation, it has already happened on Terra where liquid staking services exist and are popular even though the protocol allows (non-liquid) delegation.
Given these observations it would come very natural to think: “okay, then let’s make both delegation AND liquid staking native at the protocol level”; and you end up with the Tezos’ LPoS model, which is the other end of the spectrum. But in doing so you have skewed a lot of the initial incentives you set out to have and also have to deal with weird quirks such as smart contracts delegation.
All in all, I am quite convinced that pure PoS is the best model, but does it mean that the other models don’t work? Probably not. Just not as well, in my opinion.
Sorry for the long text, I’ve loved this discussion as it’s pushed me to really think through all the different models.
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I have nothing to add but I just want to say that this thread has been an absolute joy to read. Thank you everyone for the thoughtful discussions.
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Very interesting thread, even more with the adaptive issuance describes here Adaptive inflation
@omarino and @emchristiansen if you are interested
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