Why Validator Incentives Matter More Than Price Charts

[tradelikepro]

At the core of the analysis is Ethereum’s validator system. Validators are paid in ETH, and the paper models how they might respond if those rewards suddenly lost value. In such a scenario, Biancotti argues, it would be rational for some validators to exit the network.

As validators leave, total staked ETH would decline, weakening network security and slowing block production. That reduction could impair Ethereum’s resistance to certain attacks and undermine its ability to guarantee timely settlement—turning a market shock into a systemic operational issue.

[bonk]

market shock turning into network risk is the scary part no one prices in