How Does the ‘Opportunity Cost’ of Staking Impact the Overall Security of a PoS Network?
Opportunity cost is the value of the next best alternative use of the capital that is forgone when a user chooses to stake. A high opportunity cost (e.g. high yields in DeFi lending) means users are less incentivized to stake, potentially reducing the total staked capital.
A lower staked capital pool makes a 51% attack cheaper and easier to execute, thereby reducing the overall security of the PoS network.
