What Is the Concept of ‘Economic Finality’?
Economic finality is the point at which reversing a transaction or block would cost an attacker more than they could gain, due to the value of the required staked capital being too high. In PoS, this is achieved after a supermajority of validators have attested to a block, making the economic cost of a reversal prohibitively expensive.
Glossar
Insurance Premiums
Coverage ⎊ The concept of insurance premiums, within the context of cryptocurrency derivatives and financial engineering, fundamentally represents the periodic cost incurred to transfer risk.
Economic Finality
Settlement ⎊ Economic finality, within the context of cryptocurrency derivatives, options trading, and financial derivatives, represents the irreversible conclusion of a contractual obligation, effectively eliminating counterparty risk.
Staked Capital
Commitment ⎊ : This represents the capital locked within a Proof-of-Stake protocol to gain validation rights and secure network consensus.
Cost of Attack
Capital ⎊ The estimated financial outlay required for an attacker to acquire sufficient hash power or stake to successfully compromise the network's consensus rules represents the primary measure of this concept.