Parallelization in networks allows for enhanced computation through a larger number of protocol participants, leading to cost benefits compared to centralized systems. The cost of capital remains a critical consideration, especially in proof-of-stake (POS) and zero-knowledge (ZK) systems. Incentivizing capital involves overcoming the risk-free rate and compensating for asset devaluation risks, which drives staking rates up significantly in certain networks. For instance, the Cosmos ecosystem sees annual staking rates between 15% to 25% due to these challenges. However, in an asset-validated system (AVS) with Ethereum staking, the principal cost of capital is effectively lowered, resulting in significantly reduced staking costs. This setup allows for lower fees while maintaining liveness guarantees, where provers face economic penalties for late proof submissions without requiring high compensation for staked capital.

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