How Does a Derivative like a Futures Contract on a PoS Token Interact with the Risk of Slashing?

A futures contract on a Proof-of-Stake (PoS) token interacts with the risk of slashing by reflecting the perceived security and stability of the underlying asset. If the market perceives a high risk of widespread slashing due to a major protocol flaw or validator collusion, the futures contract price may trade at a discount to the spot price, reflecting the increased systemic risk.

Traders may also use futures to hedge against the potential price collapse that would follow a mass-slashing event, even if they are not validators themselves.