What could actually happen? What is the worst case scenario?
- Baddie would buy tons of SOL.
- This can hardly be done unnoticed.
- SOL is up 100%, all other crypto stays the same.
- Everybody is aware that something funny is happening.
- Baddie eventually has 21%.
- Baddie needs more funds for the actual attack.
- SOL is up another 100%.
- Baddie tries to make a huge trade in the order of $25B.
- Nobody wants to trade.
- The End.
Alternatively:
9. Two parties are actually willing to trade, despite all warning signs.
10. Baddie tries to double spend by having both trades in a slot for which baddie is leader.
11. Baddie must sign both blocks, we have a proof for an equivocation attack.
12. Baddie is slashed for 21% of stake because the fraud is obvious.
13. Moreover, there is a good chance that the doublespend does not even work because the baddie doesn’t manage to get 4 x 61% stake each time they need to get the certificates.
14. Baddie loses everything.
15. The End.
Now clearly, we could cap the maximum possible trade below the 21% security threshold as you suggested. I just don’t think it’s necessary at all. With so much evil money I can probably create more havoc in a centralized setting.
Note that the baddie cannot trade with themselves as you suggested since only one of the two blocks survives, since the next leader must choose a parent. So the baddie needs two gullible counterparties, and then the baddie need to funnel the money out of the system quickly enough before the second block is destroyed again (in less than 1 second). This seems impossible… but I had fun writing the Dr. Evil plot above. 