What actually happens is you receive a few wax when you set up your cloud wallet which is automatically staked for you so that you can interact with the blockchain. There is a finite amount of CPU and net resources which are shared among all the active users in the ratio of how much wax you have staked to how much of these resources are available. This is explained here using a really bad analogy to airports. So why did this system work fine a few weeks back but not so well today?
The answer can be found here. From the narrative of this statement using an equally poor hotel metaphor, a lot more players are visiting resulting in the available resources being shared among more people so everyone gets a smaller slice of free pizza.This is only one part of the explanation. The article continues '...previously influential customers in the space reserved a large amount of “rooms” that they did not use every day, so new accounts got extra resources for free. However, now these extra resources are taken up by a larger user base, so customers are only allocated the resources that automatically came with the account.'
So to use a better metaphor, the whales had superfast wi-fi but weren't using all of it so we got some free wi-fi off them but the whole neighbourhood started using it and now not even their unused wi-fi is enough to cope with everyone wanting to Netflix & chill; so everyone needs to fork-out for their own land-line (i.e. stake wax to CPU). The problem here is that everyone is competing for the same CPU resources. The result is that when the system is busy, only those with a large CPU stake are going to be able to transact. While this is ok for some on YouTube who will be able to continue scamming people, the rest of us will need to fund our transactions by buying and staking more wax or choosing times when the system is least busy - which is harder due to the influx of more players. If we all continually increase our CPU stakes, the system will not improve as we are just competing with each other for the same resources so gradually more and more of us will get priced out of the system.
Can you imagine going into Tesla and being told 'Yes we have a vehicle for you and we understand you have the money for it but unfortunately our cash-registers require you to hold a minimum of fifty million dogecoin now that our vehicles are more popular and our big dogecoin-holding board members no longer want to foot the bill for us to use our registers?'. The question we should be asking is 'if you're now making more money from more customers, why aren't you investing some of it into more resources?'. There is also the question of who benefits and who gets hurt by this change. If users need to invest more and more into staking, they have less to actually spend on digital products so artists releasing their NFT's now have a bigger market but this is combined with downward pressure on prices. There's also the knock-on effect of users now thinking they were conned as all the free-to-play games suddenly require increasingly bigger deposits to actually use.
The original article explains the benefits of staking as getting to vote on things which many of us I'm sure have very little interest in. I've also previously explored how you can earn interest on your staked wax, but this is a tiny, trivial amount compared to what you could earn from just 5 wax if you were lucky enough to get the first mint in a new series of NFT; if only you didn't need to stake ten times that amount just to transact.
What then is the solution? Well we can continue to compete with each other for limited resources by continually staking more wax rather than spending it on things we would otherwise buy, or we can resign ourselves to a decreasing allocation of transactions and progressively higher staking levels. I'm not sure if anything less than collective action is likely to see a reversal of this change. If enough people were to unstake all their wax before the next big launch event, bad publicity might force a reversal when stories emerge of lots of people having enough tokens to buy the products but the blockchain resources being insufficient to support the sales.
As for me? Well I'd rather be able to continue playing than not. I decided to sell off my standard drills, stake the wax and continue being able to mine, but back to using shovels. Hopefully I can drop a valuable NFT before the next round of stakeflation kicks in. If not then I will be writing about the best times to avoid heavy CPU usage (which at the moment seems to be weekends; short post!).
Usual disclaimers at the top of the page.
