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What Are the Risks a Validator Faces When Staking ETH?

Risks include hardware failure (inactivity penalties), malicious behavior (slashing), market price decline, and illiquidity of the staked ETH.
Greeks.Live04.11.25

What Are the Risks a Validator Faces When Staking ETH?

Validators face several operational and financial risks. Operational risks include hardware failure, power outages, and incorrect client configuration, leading to minor "inactivity" penalties.

Financial risks include the risk of "slashing" for malicious behavior, which burns a portion of their stake. Furthermore, validators face market risk, where the value of their staked ETH may decline relative to other assets.

The staked ETH is also locked and illiquid for a period.

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What Is ‘Liquid Staking’ and Its Risks?
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