Stellar does not use proof of work.

> Also, why are you seeking more funding in the first place?

AFAIK Keybase are a for-profit private company.

What is the purpose of this question? You want KeyBase, a private entity, to convince you, a stranger on the inter-webs about their plans for said funding? That's giving yourself FAR too much importance. Here's $5 bet that the company will ignore this question.

For example if you have some type of mathematical problem (the unknotting problem) to take the place of the proof of work then you have to worry that that problem is actually hard to perform. Hypothetically that problem could be quite easy and you can subvert the system by having some shortcut.

But inverting a hash is known to be hard. Through this hardness you get artificial scarcity by making people efficiently design systems to consume electricity.

if you have to hold a lot of limited thing X (that’s difficult to get; eg $10m worth of ETH) on the very chain you’re securing, then that’s scarcity too.

another benefit here is that you can make a trusted network; that way you don’t have nodes coming and going, you have a group of trusted parties with their own network, and there’s less potential for a 51% attack

electricity and work isn’t the only thing that can be scarce

The other thing that is compelling about Bitcoin's proof of work protocol is the ideal that every participant is equal. The whole point is to avoid the circumstance where more money means more control. Now, I think we can probably all agree that this didn't pan out -- whoever controls the big mining pools controls the system. I think that if anyone is going to go to the next level they probably have to step back and look at the problem with fresh eyes. Substituting X into "Proof of X" is unlikely to provide the solution, IMHO.