Limits On Proof-of-Stake Scalability

Abstract

We explore whether the proof-of-stake mechanism can be used to build financial infrastructure with multidecade reliability. The core finding is that, for a decentralized permissionless system with exponential growth, fundamental physical limits render the answer "no." We then present partial solutions based on relaxing the degree of decentralization and discuss how existing DeFi documentation and behaviors suggest this result is unsurprising.