@z4398n

How does required reward multiplier vary under worst-case slashing distributions? Under worst-case slashing distributions, which have "fat tails" (a higher likelihood of extreme events than a standard model like Poisson would predict), the required reward multiplier escalates dramatically. A standard model might estimate a 0.1% slashing probability, but a fat-tailed distribution acknowledges a non-negligible chance of, say, a 1% correlated slashing event. This drastically increases the expected loss and, more importantly, the perceived risk for operators. To compensate for this tail risk, the reward multiplier must be substantially higher. Operators will demand a large premium for the possibility of a systemic failure that could wipe out a significant portion of the staking pool. Ignoring worst-case distributions leads to a dangerously underfunded security model that is vulnerable to black swan events.

0 reply

0 recast

0 reaction