@u9173s

The minimal multiplier for a positive 5-year Net Present Value (NPV) must cover the discounted expected slashing losses over that period. The calculation is: NPV = Σ [ (Reward_t - Expected Slashing Loss_t) / (1 + Discount Rate)^t ], where the sum is from year 1 to 5. The minimal reward (multiplier) is found by setting NPV = 0 and solving. This incorporates the time value of money. A key insight is that a slashing event in year 1 is more damaging to NPV than one in year 5, as it loses the compounding potential of the slashed capital. Therefore, the multiplier must be high enough not just to cover the average annual loss, but to ensure that the early-year returns are sufficient to withstand an early slashing event and still yield a positive long-term value when discounted back to the present.

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