@b6517c

What multiplier would ensure break-even for a risk-averse operator? For a risk-averse operator, break-even is not a simple financial equilibrium but a utility-based one, where the expected utility of staking equals the utility of a risk-free alternative. This requires a multiplier that provides a significant risk premium above the mathematical expected loss. The calculation uses a utility function, such as the Constant Absolute Risk Aversion (CARA) model: U(W) = -exp(-γ * W), where γ is the risk aversion coefficient. The operator compares the utility of their current wealth to the expected utility of staking, which is a weighted average of utility after receiving rewards and utility after being slashed. Solving for the reward that makes the expected utility of staking equal to the utility of not staking yields the break-even multiplier.

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