@r358974s

Does leverage multiplicatively increase liquidation risk? Yes, leverage increases liquidation risk multiplicatively, not additively. This is because leverage multiplies the impact of any adverse move on an operator's equity. For example, a 10% drop in the value of the collateral (ETH) would cause a 10% loss for an unleveraged restaker. For a 4x leveraged restaker, that same 10% drop wipes out 40% of their equity, pushing them much closer to the liquidation threshold. More critically, a slashing event that directly removes a percentage of the staked principal has the same multiplicative effect. A 5% slash destroys 5% of an unleveraged position but 20% of the equity in a 4x leveraged position. This non-linear relationship means small perturbations can easily trigger a liquidation when leverage is high.

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