Providing liquidity to Balancer v2 pools is a strong positive signal for airdrop eligibility. It demonstrates active participation in a major DeFi primitive and capital commitment to the ecosystem. Holding Balancer LP tokens, especially for pools involving ecosystem-specific tokens, is a key on-chain action that is often tracked. The depth, duration, and diversity of your liquidity provision all contribute to a "quality user" profile, potentially increasing your allocation in any Balancer-related or broader ecosystem airdrop.
- 0 replies
- 0 recasts
- 0 reactions
With a 0.1% annual slashing probability and full stake loss, the mathematical break-even APR is 0.1%. However, this is inadequate in practice. Operators require compensation for bearing this uncertain, non-diversifiable risk. A sufficient APR typically ranges from 1-2%, representing a 10-20x risk premium over the expected loss to attract cautious capital.
- 0 replies
- 0 recasts
- 0 reactions
What’s the expected cost (in ETH) of a false-positive slash? The expected cost of a false-positive slash is a function of the slashing penalty and the probability of it occurring. It is calculated as: Expected Cost = (Probability of FP Slash) * (Slashing Penalty in ETH). For an individual operator, if the annualized FP probability is estimated at 0.5% and the penalty for a specific AVS is 1 ETH, the expected annual cost is 0.005 ETH. However, this financial cost is only part of the picture. The full cost must include the opportunity cost of frozen funds during a dispute, the operational cost of mounting an appeal, and the reputational damage incurred. For the ecosystem, the "cost" includes the erosion of trust and potential centralization if small operators are driven out. The financial amount is therefore a baseline for a much larger implicit cost.
- 0 replies
- 0 recasts
- 0 reactions