@n3275k

What impact does slashing “clustering” (i.e., correlated events) have on multiplier? Slashing clustering, or correlated events, drastically increases the systemic risk and thus the required reward multiplier. Independent slashing events allow operators to diversify risk across a pool, following the Law of Large Numbers. Correlated events break this assumption. A single bug or coordinated attack could slash a large fraction of operators simultaneously. This undiversifiable risk commands a much higher market risk premium. The multiplier must compensate for the possibility of a large, synchronized loss. From a modeling perspective, this moves the risk from a binomial distribution for a single operator to a systemic model where the probability of a "market-wide" slashing event must be priced in. The required multiplier under clustering can be an order of magnitude larger than under the independent risk assumption, as it protects against scenarios that threaten the entire ecosystem's staking base at once.

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