How Can a Derivatives Market Be Used to Price the Risk of a PoW Vs PoS Attack? ▴ Learn

How Can a Derivatives Market Be Used to Price the Risk of a PoW Vs PoS Attack?

Derivatives markets can price this risk through the implied volatility (IV) of options. Options on a coin perceived to be more vulnerable (e.g. a low-hash-rate PoW coin) will have a higher IV compared to a coin with robust PoS security, reflecting the higher market-perceived risk of a catastrophic price crash.

Furthermore, the pricing of futures contracts might show a higher risk premium for the more vulnerable coin.

How Does ‘Volatility Skew’ Affect the Margin Calculation for Out-of-the-Money Options?

How Can a Trader Profit from a Perceived Mispricing in the Volatility Skew?

How Does Implied Volatility of an Option Relate to Perceived Security Risk of a Coin?

Are Proof of Stake Networks Also Vulnerable to Majority Attacks?