How Does the Capital Requirement for Staking Influence Decentralization?

A high minimum capital requirement for staking can negatively impact decentralization by creating a barrier to entry for smaller participants. Only wealthy individuals or large pools can afford to run a validator node, leading to a concentration of power.

Conversely, a low or zero minimum requirement encourages wider participation, distributing validation power across more entities, which strengthens decentralization and Sybil resistance.