Is Proof of Stake a scam? Dragonfly partner: Paying for network security is a meme

Proof of Stake (PoS) and Staking mechanisms have been viewed in recent years as blockchain operating models that combine economic and network sustainability, not only enhancing network security but also creating stable income for participants. However, according to Haseeb Qureshi, a partner at Dragonfly, those 8% risk-free yields are merely an illusion of preventing asset dilution, not genuine returns. Haseeb mentioned in a recent Podcast with The Rollup that most current staking models are an economic illusion. Viewing staking as risk-free income is actually just a means of preventing asset dilution: "If you stake with an 8% annual yield, but the underlying asset is also inflating by 8% annually, you're essentially earning nothing and might even be taxed on this nominal yield." He emphasized that the baby boomer generation loves yields, which is why such products are created without considering the structural flaws in PoS token economic design: "When staking returns are merely combating inflation rather than creating real value, it's similar to 'high-yield junk bonds' in traditional financial markets." The core concept of PoS is to let token holders stake assets, become validators, and enhance network security through economic incentives. However, Haseeb believes this logic has always been flawed. He candidly stated that most PoS chain validators are now almost exclusively large professional institutions operating across chains and deploying at scale, almost monopolizing validation nodes. Haseeb also satirized many Ethereum spot ETF investors, pointing out that their inability to participate in staking means their holdings are being diluted every moment, which is why many traditional financial institutions are eager to incorporate staking functionality into ETF structures. He predicts the next phase will involve adjusting inflation design and reducing staking returns: "People are realizing that inflation is inevitable but should be maintained at a very low level. Staking's purpose shouldn't be to entice with returns but to maintain the network's minimal operational capacity." It's not hard to imagine that future consensus and inflation mechanism designs will gradually be re-examined, and step-by-step adjustments will nurture a more robust and secure blockchain ecosystem. Risk Warning: Cryptocurrency investment carries high risk, with potentially significant price volatility. You may lose all your principal. Please carefully assess the risks.

Here's the English translation: The Osaka World Expo in 2025 has attracted global attention. Since Osaka's real estate prices are relatively cheaper compared to the expensive and saturated Tokyo market, and with the recent flourishing tourism industry, it has become a top choice for many Chinese immigrants for retirement. However, due to the large profit potential, investors want to invest but are hindered by language and legal knowledge barriers, which provides an opportunity for scam groups, making Osaka a new stage for land scammer groups. The well-known Hong Kong YouTuber Mr. Atom exposed a cross-border land fraud targeting Hong Kong people, and around the same period, NHK and multiple Japanese media outlets revealed the shocking "Osaka land scammer" incident, where scam groups impersonating landowners successfully defrauded over 1.4 billion yen, with victims including prominent companies from Japan and China. Although the two fraud cases are not directly related, they share common points of using "Osaka real estate investment" as a cover, with Chinese people among the victims who invest large sums of money only to realize they've been scammed. Below is a comprehensive compilation of the reports. [The rest of the text follows the same translation approach, maintaining the original structure and translating all non-HTML content to English.]

The main suspects in the Osaka Land Broker case are Hirokazu Fukuda and Ryohei Kume. They impersonated the actual owners and land ownership company of three properties in Osaka's Minami Ward. A female member in her 60s in the fraud group posed as the company's president, using a forged driver's license to submit documents to local government agencies. They successfully deceived officials, changed the land ownership registration, signed purchase contracts with two real estate companies, and fraudulently obtained 1.45 billion yen - just like in the Netflix drama "Land Broker", where real estate investors thought they were getting a bargain but ended up with nothing.

How Was the Osaka Land Broker Case Exposed?

According to reports, property management personnel noticed someone trying to open a property's door but found the key had been changed. When they contacted the owner, he was surprised, stating he had never sold the property. The management personnel noted that several people believed they had purchased the building but actually bought "nothing". The true owner suggested reporting to the police, which ultimately exposed the entire incident.

The president of the property-owning company revealed in an interview that he had noticed something unusual as early as last February. At the time, the president commissioned a judicial scrivener to check the company's registration for another matter and discovered that the "representative director" column had been changed to someone named "Kume" without his knowledge.

Japanese Public Agencies Misled by Land Brokers' Forged Documents, Original Owner Furiously Files Lawsuit

Most incredibly, the land brokers could "fabricate truth" by deceiving officials with forged documents, even fooling Japanese ward offices and legal affairs bureaus. The commissioned judicial scrivener frantically ran to the ward office and legal affairs bureau, requesting to view land registration application documents, but they refused, citing personal information protection.

The property president, upon receiving inquiries from multiple real estate companies about his property, realized this was a "land fraud" case. He stated that even after explaining to legal affairs bureaus that the registration was fake, they didn't believe him, claiming the submitted documents were genuine. He ultimately had to spend significant time and money on a civil lawsuit, with his anger finding no outlet.

How Did the Suspects Impersonate the Owner?

NHK investigated the specific methods of the land brokers. According to investigators and civil trial documents, suspects first forged a promissory note claiming the female president of the property-owning company borrowed money from them. They presented this note to the government ward, impersonating creditors to obtain a copy of the president's resident registration card.

Under Japan's resident registration law, local governments can release copies of a debtor's documents for debt collection purposes. Japanese police told media this system was being abused.

The fraud group illegally obtained the president's personal information from the resident registration card. A female group member successfully impersonated the owner using a forged driver's license.

Osaka Real Estate Investment as Bait: Information Gaps and Insufficient Legal Knowledge are Key

Although the two cases differ in background and members - one involving a transnational group scamming Chinese communities, the other a domestic Japanese fraud group - the fraud logic is surprisingly consistent. They used Osaka real estate as bait, exploiting legal loopholes in Japan's land administration system by impersonating landowners and developers, providing fake documents that made verification difficult. While the mastermind was Japanese, multiple Japanese media reports indicate most victims were Chinese.

The author believes the old adage "Don't Trust, Verify" remains eternally useful. When hearing about seemingly "too good to be true" investment opportunities, don't be deceived by fraudulent rhetoric. There's no such thing as a free lunch - protect your assets and wealth.