What Is the Significance of ‘Slashing’ in a Proof-of-Stake (PoS) System?
Slashing is a punitive mechanism where a validator's staked cryptocurrency is partially or fully taken away if they act maliciously or fail to perform their duties correctly. This includes double-signing transactions or prolonged downtime.
Its significance is that it provides a strong economic disincentive for misbehavior, securing the network by ensuring validators act honestly and reliably.
Glossar
PoS System
Architecture ⎊ This consensus mechanism relies on a set of validators who lock up a quantity of the native cryptocurrency as collateral to gain the right to propose and attest to new blocks on the chain.
Staked Cryptocurrency
Yield ⎊ Staked cryptocurrency represents a capital deployment strategy wherein digital assets are actively held within a validation mechanism, typically Proof-of-Stake blockchains, to support network operations and, in return, generate additional cryptocurrency as reward.