The Bank of Italy simulates the risk of Ethereum price dropping to zero: some validators may rationally choose to exit

Foresight News reported that the Bank of Italy has released a new research paper titled "What if the Price of Ethereum Drops to Zero? How Cryptocurrency Market Risks Turn into Infrastructure Risks." The paper simulates the extreme scenario of Ethereum's native token price dropping to zero to illustrate how market risks of Ethereum can translate into infrastructure and financial stability risks.

The bank's economist Claudia Biancotti explored how an extreme shock to Ethereum's price could impact the cryptocurrency market. She believes that some validators might rationally choose to exit, which would slow down block production and weaken Ethereum's ability to resist certain attacks and ensure the timely final settlement of transactions.