How Might a Security Breach in a PoA Network Affect the Valuation of a Cryptocurrency Derivative?

A security breach, such as a successful double-spend or chain manipulation, would severely erode confidence in the underlying cryptocurrency. This would lead to a sharp decline in its spot price.

Consequently, any derivative tied to this asset, like an option or future, would experience a corresponding, often magnified, negative impact. The breach introduces extreme market volatility, increasing implied volatility and the cost of hedging.