Slashing

PoS penalty: validator loses part of locked stake for misbehavior.

Proof of Stake validators must lock collateral (e.g. 32 ETH). If they misbehave, sign conflicting blocks, go offline at a critical moment, or try to cheat the network, the protocol automatically confiscates part (from 0.04 ETH up to the full 32 ETH) of their stake. This economic punishment replaces the physical energy of PoW. Slashing affects you indirectly too: when you stake through Lido or another operator, their slashing reduces your stETH.

In plain words

Proof of Stake validators (e.g. Ethereum) must lock tokens as collateral. If they cheat or are offline at a critical moment, the network automatically confiscates part of the stake. It affects you indirectly: if you stake through Lido or another service, that operator's slashing cuts the value of your stETH. Pick proven operators.

Example

Lido, June 2024: one operator (Stakefish) had downtime, 0.005% of staked ETH was slashed = ~30 ETH.

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