As a thought exercise, suppose a proof is stake currency was only used by one person. How exactly does do it’s dividends create value? In short “crypto dividends” don’t actually create any value it’s purely incrementing an arbitrary number rather than creating an income stream.

The same is true if N people use the currency without any new money coming in they can’t cash out. Therefore it’s not an actual dividend. This is why everyone calls crypto a pyramid scheme, the only way to cash out is to get someone else to buy in.

For proof of stake, I agree - I think it's useful to instead focus on net issuance. For ETH2 this could very well could be negative since the base transaction fee will be burned, and transaction fees currently are greater than miner rewards a decent percentage of the time.

Proof of stake coins that don't have much usage and mostly pay out rewards from new issuance have an interesting piece.. - they are inflating the base supply to pay out dividends that holders pay taxes on. Effectively moving normal gains from the capital gains bracket to regular income, which is sub-optimal.

For DeX's, the image is a lot better - the biggest issue here is - are fees arbitrarily high, and will they go down over time. My gut says the percentage fee will go down, but the volume increase will more than make up for this loss.

US dollars wouldn’t be worth very much either if you were the only one using them.

> The same is true if N people use the currency without any new money coming in they can’t cash out.