What Is the Process of “Slashing” and What Triggers It in a DON?
Slashing is the punitive mechanism where a portion of an oracle node's staked collateral is permanently removed. It is triggered when the node is proven to have acted maliciously (e.g. reporting a false price, colluding with others) or has failed to perform its duty (e.g. prolonged downtime).
Slashing serves as a strong economic deterrent against dishonest behavior.
Glossar
Economic Deterrent
Mitigation ⎊ An economic deterrent, within cryptocurrency, options trading, and financial derivatives, functions as a strategic disincentive designed to curtail specific behaviors or exposures.
Slashing
Penalty ⎊ Slashing, within the context of proof-of-stake blockchain networks, represents a mechanism for penalizing validators who engage in malicious or faulty behavior, directly impacting network security and consensus integrity.