This argument completely misses the mark.
First, staking yield ≠ free money. In proof-of-stake, rewards are the network’s security budget — paid to validators who keep the chain running. It’s not “printing tokens for fun,” it’s compensating work that prevents attacks.
Second, dilution only matters if supply growth outpaces demand. If usage, fees, and adoption grow faster than issuance, you get price support or even deflation — which is exactly what happens on Ethereum post-merge (EIP-1559 burns more ETH than is issued at times).
And here’s the real irony: Bitcoin does the exact same thing. Mining creates new BTC every block — that’s also dilution. Bitcoin’s current inflation rate is ~0.83%, while Ethereum’s is ~0.76% — lower than Bitcoin’s. If you think staking rewards are a “gimmick,” you have to call Bitcoin mining rewards a gimmick too.
Your gold analogy also falls flat. Gold’s price isn’t based solely on a fixed supply — it’s based on production vs demand. If demand grows, higher production doesn’t necessarily tank the price. The same applies to ETH or BTC — issuance isn’t inherently bad if the network is becoming more valuable.
Calling everyone who participates in staking “stupid” isn’t an argument — it’s just lazy cynicism. The real question isn’t whether there is issuance, but whether the issuance is sustainable and tied to real economic activity. In Ethereum’s case, it is — and the data proves it.
Its basic commonsense. Imagine a company that does a "stock split". Give you 1 share for every one held. The net effect is that you now have two shares, worth half as much, due to the 50% dilution. This trick has been tried in trad-fi for many years - people do fall for it, particularly less educated ones.
You can read about the dilutive effect of Eth issuance here:
https://cryptorank.io/news/feed/7944d-ethereum-inflation-soars-amid-staking-surge-and-dencun-changes-less-than-100k-eth-away-from-pre-merge-levelsHow staking leads to dilution:
Issuance of new ETH: The Ethereum network issues new ETH to pay validators who stake their ETH and perform duties to secure the network. This creates a new supply of ETH, which increases the total circulating supply over time.
Increased staking participation: As the amount of ETH staked increases, the protocol increases the total ETH issuance to reward all new validators. This, in turn, amplifies the dilutive effect on all ETH holders
.
Dilution of non-stakers: Holders who do not stake their ETH are directly exposed to this dilution, as the value of their holdings is reduced by the increase in the overall ETH supply.
Stakers are also diluted: Even stakers, who receive new ETH as rewards, are subject to this dilution. While they gain more ETH, the price of each ETH is diluted by the larger overall supply. For stakers, the net effect depends on whether their earned rewards outpace the dilution of the network.
Don't fall for this "staking yield" trickery - you are smart than that! If you want a legitimate "yield", just buy one of the Microstrategy products - STRF for example offers a 10% "BTC yield".
The main thing to remember here is that by staking and "earning new ETH", all you are essentially protecting yourself from this loss of network share.
The act of staking becomes a way to maintain or increase your percentage ownership of the network, rather than just an opportunity for profit (although many are confused by this concept).
I believe you are smart enough to understand this, but also smart enough to try to trick others about it - hence my need to clarify.
