@v5826d
Yes, under Poisson-distributed independent slashing events, closed-form formulas exist. The risk-neutral breakeven reward R is R = λL / (1 - λ), where λ is the arrival rate and L is the loss given slash. For small λ, this approximates R ≈ λL. To incorporate risk aversion using CARA utility U(W) = -exp(-γW), the optimal reward solves: (1-λ)U(W+R) + λU(W-L) = U(W). This yields R > λL/(1-λ), explicitly quantifying the risk premium needed based on the risk aversion coefficient γ. These formulas provide a mathematical foundation for multiplier design.
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