I brought up an issue in around 2017 - 2018 with regards to proof of stake on Cardano.
My opinion (not professional) was that delegating Ada and receiving stake pool rewards is essentially the same as receiving winnings in a raffle/lottery.
Using this principle it would make receiving stake rewards participation in an illegal lottery as there is no license to operate a lottery within Cardano (although it is a decentralised system).
Flipping this problem and providing a solution may be beneficial, regardless of legal requirement.
Assuming POS is illegal eg operating an illegal lottery, how do we get around that?
There are two options : 1 - ensure skill is used to participate or 2 allow free entries alongside paid entries.
A skill based requirement is cumbersome and would require active and ongoing participation from delegators.
Free entries can simply resolve this and would require a sort of digital free entry with an attached processing fee.
How does a free entry work?
A free entry can be a postcard with a stamp on it, an SMS or similar, as long as the operator of the “lottery” does not profit from it, the entry is treated equally to a paid entry etc
Whats the benefit of this?
If we assume all the above and resolve the problem using a free entry system alongside paid entries, then stake pool rewards become a tax free event in many countries (including Germany).
This could provide a gigantic incentive to delegators to start delegating with Cardano.
I’m happy to answer any questions about this to the best of my knowledge.
For reference I am participating in fund 4 and 5