Economic Finality Threshold

The Economic Finality Threshold is the point at which the cost of attempting to reverse a transaction exceeds the potential gain for an attacker. This concept is vital for protocols that use economic incentives to secure the network, such as slashing in Proof of Stake.

If an attacker must stake millions of dollars to attempt a reorganization, the economic finality is high, even if the protocol technically allows for small reorgs. This threshold provides a practical security guarantee for financial institutions and traders who need to assess the risk of their transactions being reverted.

It aligns the incentives of network participants with the security requirements of the assets they are handling.