Spendable consensus keys?

[Andrew]

@adrian

On point 1 I would also like to add that a vast majority of the funds on consensus keys today are non-spendable, since they are locked in security deposits. An example from the Everstake baker is that the security only about 13% (249,236/1,904,348) of the funds are actually spendable and the rest are locked up. However these security deposits are still at risk, since if an attacker takes over a baker, the attacker can claim 50% of the deposits as a reward and the other 50% will be burnt. So right now Everstake has about 1,655,112 XTZ (or about 4,468,802.4 USD) worth of incentives to secure their consensus key regardless of whether it is spendable or not, because if their key is compromised they will lose the full amount.

This is exactly the point I was trying to make in the other thread.

Stateful Baking Accounts

Hi Justin! The bakeries that are closer to being fully delegated have basically the same amount of funds, that are slashable (especially at the end of each cycle which is the point attacker would use) as their actual spendable amount. I haven’t done a proper analysis on this, I am just saying, that there is a case where amount_of_slashable_funds is approximately equal to amount_of_spendable_funds. I don’t think people will rush to make their bakeries less secure by abandoning their HSMs / HW …

@adrian

On point 2 I would like to add that only incredibly gullible bakers would outsource this, because whoever controls the consensus key has the ability to fully slash all funds in the bakery (as illustrated in the above paragraph).

+1