What Is ‘Slashing’ in PoS and How Does It Influence the Network Effect?

Slashing is a punitive mechanism in Proof-of-Stake (PoS) systems where a validator's staked tokens are partially or fully confiscated for malicious or negligent behavior. This mechanism enforces protocol rules and increases the integrity of the network.

The threat of slashing builds confidence in the network's security and honesty, thereby strengthening the network effect by attracting more capital seeking reliable returns.