Slashing is an economic penalty used by some Proof-of-Stake networks to reduce a validator's committed stake when the validator violates specific protocol rules. The purpose is to make certain forms of malicious or critically incorrect behavior economically costly.

Slashing should be distinguished from simply losing potential rewards because of poor availability. Missing some duties may reduce expected rewards, while slashing normally involves an actual reduction of economic stake. The exact conditions vary between blockchains.

What can cause slashing

A well-known class of violations involves signing incompatible messages, such as voting for conflicting states when the protocol prohibits that behavior. Such actions can threaten consensus safety. Other networks define additional conditions that can result in penalties.

The size of a slash is determined by the network. It can depend on the type of violation, the amount staked, the number of related violations, and protocol-wide conditions. There is therefore no universal slashing percentage that applies to all PoS networks.

Risk for delegators

In some models, penalties affect not only the validator's own funds but also stake delegated to that validator. As a result, a delegator can take on part of the validator's operational and protocol risk without operating the validator itself.

Validators reduce operational risk through secure infrastructure, key management, redundancy, and monitoring. Preventing situations in which multiple validator instances sign conflicting messages is particularly important.