What Is the Relationship between the Staking Participation Rate and the Network’s Security Budget?

The staking participation rate (the percentage of total supply being staked) is directly related to the network's security budget. Higher participation means more capital is committed to securing the network, which increases the cost of mounting a 51% attack.

To incentivize this participation, the network must offer sufficient staking rewards, which constitute the security budget. A low participation rate suggests the security budget is insufficient, exposing the network to greater risk.