Who Receives the Slashed Funds?

The destination of slashed funds varies depending on the specific Proof-of-Stake (PoS) protocol. In some networks, a portion of the slashed funds is burned, meaning it is permanently removed from the total supply.

This benefits all token holders by making the remaining tokens scarcer. In other protocols, a portion of the slashed funds may be given as a reward to the "whistleblower" validator who first reported the malicious behavior.

Often, it's a combination of both burning and rewarding the reporter, creating incentives for self-policing within the network.