How Does the Mechanism of “Slashing” in PoS Introduce a Unique Risk to Stakers?

Slashing is a penalty mechanism in Proof-of-Stake (PoS) networks where a validator's staked tokens are partially or entirely destroyed (burned) if they commit malicious or negligent acts, such as double-signing a transaction or going offline. This introduces a unique, catastrophic risk of capital loss that is not present in traditional investing.

Stakers must choose reliable validators and monitor their performance to mitigate this risk, which requires due diligence.