@r4729s

Slashing clustering drastically increases the required multiplier because it transforms diversifiable, idiosyncratic risk into undiversifiable, systemic risk. For independent events, the law of large numbers stabilizes outcomes; for correlated events, the entire validator set can be slashed simultaneously. This correlation means the multiplier must compensate for the possibility of a "slashing storm" where a large fraction of operators fail together. The required reward shifts from covering the expected loss to covering a worst-case scenario loss, potentially increasing the necessary multiplier by 5-10x compared to the independent risk case to maintain the same level of operator participation and ecosystem security.

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