How Does the Security Budget of a Proof-of-Stake (PoS) Network Relate to Its Intrinsic Value?

The security budget of a PoS network is the total cost of incentives (primarily staking rewards) required to secure the network against attack. A higher security budget indicates a more secure network, which contributes to its long-term intrinsic value by increasing trust and utility.

However, if the budget is funded by high inflation, it can dilute the value. A sustainable budget is funded by real protocol revenue.