What Is Slashing?
Slashing is a penalty mechanism in Proof-of-Stake (PoS) blockchains that destroys a portion of a validator's staked tokens for violating network rules. The two primary offenses are: double signing (signing two different blocks at the same height, attempting to create a fork) and extended downtime (being offline for too long and not participating in consensus).
How Slashing Works
The severity of slashing varies by network: Ethereum slashes at least 1/32 of the validator's stake for a single offense, with penalties increasing if many validators are slashed simultaneously (to punish correlated failures that suggest a coordinated attack). The slashed amount is burned, reducing the total supply. Validators may also face forced exit from the validator set.
Why It Matters for Traders
Slashing risk is a critical consideration when choosing staking providers or liquid staking protocols. Validators with professional infrastructure and geographic distribution minimize slashing risk. When staking through liquid staking (Lido, Rocket Pool), the protocol's validator set diversity directly affects your risk — if a Lido node operator gets slashed, it affects all stETH holders proportionally.