Shielded stNAM is not the essential shielded NAM though.
Without incentives, there will not be a sizeable shielded set.
Without a sizeable shielded set, an asset cannot be protected effectively.
In order to protect other IBC assets, NAM needs to be protected too, otherwise the gas fee transactions will leak information about the origin of those IBC assets.
Therefore, NAM needs an incentivized shielded set.
The lack of natively shielded stakeable NAM is a risk for both the security of the protocol and the effectiveness of shielding. If the reward rates become too unbalanced, people will choose one or the other. The staking reward rate and the shielded set reward rate would have to be continuously balanced against each other. Both are already targeting ratios with PD-controllers. Namada Specs - Inflation System However, there are possible adverse effects.
- Having to choose between staking or shielding, the rewards may not outweigh the opportunity cost of locking NAM. In fact, staking NAM with Stride and shielding stNAM competes with shielding NAM. The reward rate for just shielding NAM is almost guaranteed to be lower, which means the shielded set would be empty if every participant behaves financially rational.
- Even if shielding and staking are balanced, both would benefit from native shielded staking. Let us say 50% of supply is staked and 50% is shielded. With native shielded staking, 100% is staked and 100% is shielded, doubling the effectiveness of both.