The most significant flaw of any proof-of-stake system and any system that diminishes coin rewards, is it can't distribute currency from the hoarders to the users of the currency, thus it will end up with the hoarders (the banksters) accumulating all the coin and the currency usage dying.

This is because the wealthy spend a much lower % of their net worth than the masses do.

Freicoin if I am not mistaken, sends the demurrage into the ether, so those who transact more often see their coin balances decline less fast, thus it effectively redistributes relative coin value to the users of the currency. That could in theory be combined with a proof-of-stake system. The problem is correctly as Impaler described it, how to secure the public ledger.

Although I admire how demurrage distributes directly to those who transact the most, it suffers from the fact that spenders are not necessarily doing anything to secure the coin (except perhaps increasing its long-term value, thus value of mining if coin rewards do not diminish). Spending can even be wasteful and misallocation of capital. Indiscriminately subsidizing spending (or anything) is not good economics. Zero transaction fees would already be a significant gift to spenders. Demurrage also reduces the balances of holders, I find it difficult to conceive how it will be popular. Whereas coin rewards do nothing to balances, and also apparently nothing to coin value since Bitcoin is rising in price while the debasement is currently 12.5% new coins in the money supply this year.

Whereas those who actually mine are proactively using their time, ingenuity, initiative and capital to secure the network, thus it seems more capitalistic they should receive the redistribution from the hoarders. Besides it may be the only viable way to secure the public ledger.