How Would the Risk of a 51% Attack Affect the Collateral Requirements for a Decentralized Options Protocol? ▴ Learn

How Would the Risk of a 51% Attack Affect the Collateral Requirements for a Decentralized Options Protocol?

A high risk of a 51% attack on the underlying asset would force a decentralized options protocol to significantly increase its collateral requirements. This is a necessary defense against the risk of the underlying asset's price being manipulated or a double-spend occurring.

Higher collateral acts as a safety buffer to absorb potential losses from sudden, artificial price movements, protecting the protocol's solvency and the integrity of its options contracts.

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