Security Budget Decay
The payment that funds honest block production declines as issuance falls, and if fees do not replace it, the cost of attacking the chain falls with it.
How it happens
Block producers are paid from issuance plus transaction fees, and the size of that payment sets how much honest capacity the chain can support. In proof of work, hash rate follows revenue, so when a subsidy halves and fees do not compensate, some hardware becomes unprofitable and the cost of renting enough hash power to rewrite recent blocks falls. In proof of stake, issuance is the return that compensates people for locking capital and accepting slashing exposure, so a lower rate can reduce the amount staked and therefore the capital an attacker must acquire to reach the protocol's one-third or two-thirds thresholds. The transition from subsidy to fees is the central open question of the design, and fee income is volatile and, as noted elsewhere, often concentrated in a single use case.
What you can actually observe
The security budget, meaning issuance plus fees paid to producers over a period, is computable from public data, as is the share of it contributed by fees rather than subsidy. For proof-of-work chains, compare the cost of renting hash power for an hour against the value that settles in that time; smaller chains with rentable hash power have observable reorganization histories. For proof-of-stake chains, look at the staking ratio and at the cost of acquiring a threshold share of stake given real market depth.
Precedent
Bitcoin's block subsidy halves on a fixed schedule roughly every four years, and several smaller proof-of-work chains with modest hash rates have suffered reorganizations in which an attacker rewrote recent blocks.
What makes it more or less material
Weigh the fee share of total producer income, the schedule of remaining subsidy reductions, the cost of renting attack capacity relative to value settled, and whether exchanges require deep confirmations for that chain.
Related factors
Assets this applies to
The largest assets we classify in the categories this factor applies to. Presence here means the factor is relevant to that kind of asset, not that it has occurred.