For those of you that don't know, Binance is offering LOCKED staking on the Binance platform that can earn investors about 17.5% APY if locked for 90 days. In his video today, the Cryptoviser portrayed this move as a "game changer" in his discussion about the topic.
But just so we're on the same page:
Exchanges entering the game was always an inevitability, and it is the way the stake pool system was designed in the first place. We always knew big exchanges were going to come in and make stake pools. We always knew these exchanges were going to offer more competitive pricing and be able to attract stakers away from the smaller pools. In the CV discussion, it was alluded to that this high ROS would eventually make small pools obsolete. I do not think this is the case. Just like how Home Depot, Lowe's, and ACE compete with Joe's Hardware. There will always be a demand for the personal touch of a small business. And it is up to the small businesses to make sure they are offering some other additional touch or service that the exchanges are not.
Also, don't forget that 17.5% APY may look like a lot, but really it is only about 12% more than you would be making anyways. With 100,000 ADA, after a year of LOCKED staking, you would have \~12,000 more ADA. Don't get me wrong, this sounds great, but don't be fooled, you have to EARN this annual return. You pay for it with your vote. You pay for it with your security. And you pay for it with a lack of liquidity. It takes at least one day to unlock your ADA. Also, Binance can choose to disregard the program at anytime.
For me, I think Binance has an incentive to keep the K-parameter low so that other smaller pools will die off. I think they will using their voting power and your (volunteered) voting power to shape the network how they want it. And don't forget, the network only has value because the community gives it value. If the network parameters no longer reflect the will of the community, all the retu...