How Does ‘Slashing’ Work in a Proof-of-Stake System?
Slashing is a punitive mechanism in Proof-of-Stake (PoS) protocols designed to penalize validators who act maliciously or negligently. If a validator double-signs a transaction (malicious) or goes offline for an extended period (negligent), a portion of their staked tokens is automatically taken away (slashed) by the protocol's smart contract.
The slashed tokens are typically burned or redistributed. This economic deterrent ensures validators maintain high uptime and act honestly, securing the network against bad actors.
Glossar
Economic Deterrent
Mechanism ⎊ Economic Deterrent is a feature built into a protocol's incentive structure designed to impose a cost on malicious behavior that outweighs any potential illicit gain, thereby encouraging honest participation.
Staked Tokens
Collateralization ⎊ Staked tokens represent an asset class where underlying capital is locked within a protocol to secure network operations or participate in consensus mechanisms, effectively functioning as economic collateral.
Slashing Parameters
Parameter ⎊ Slashing Parameters are the set of quantifiable, protocol-defined variables that govern the severity and execution of financial penalties against misbehaving validators or staked entities within a Proof-of-Stake (PoS) network.