My view of Proof of Stake is that the incentive to “hold” coins reduces market liquidity. This in turn results in rapid increases in price due to insufficient supply. This built in “pump” mechanism then messes up any incentive for validators (especially early or large stakeholders) since they will generate a higher return from selling versus validating. This cycle will repeat endlessly as the price accelerates to zero, effectively creating a ponzi-like mechanism. You can see this in the charts of a number of PoS coins that have been around for a while like Nautilus, NXT, and Steem.
I don’t have the math skills to simulate this, but from my perspective this seems like a more critical problem than some of the technical issues you’ve covered regarding PoS. It seems possible to avoid the liquidity problem with a ‘rock-paper-scissors’ method of validation that does not incentivize holding of funds and rewards validators more randomly, but then the problem could be an insufficient incentive for validators.
I would be interested in hearing your thoughts on what appears to be a fundamental liquidity problem that arises from the incentive structure of validation or perhaps there is a flaw in my thinking, but from what I’ve observed of other PoS coins this price action seems to be typical.
