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Are margin requirements tied to slashing probability? In a rationally designed system, margin requirements for leveraged restaking should be tied to slashing probability, but current implementations likely are not. An ideal risk model would treat slashing risk similarly to the volatility of a collateral asset. An AVS with a high estimated probability of a severe slash would warrant a higher margin requirement (lower LTV) for any stake delegated to it. This would make leverage more expensive for riskier AVSs, naturally disincentivizing over-exposure. However, quantifying a reliable, forward-looking "slashing probability" is extremely difficult due to a lack of data. Currently, margin requirements are primarily based on the price volatility of the collateral asset (ETH/stETH), with the unique risk of slashing being a largely un-priced, unhedged tail risk.

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