Good morning.
I’m Mitsui, a web3 researcher.
Every Saturday and Sunday at noon, we’ll deliver articles explaining basic vocabulary. We aim to keep each article concise enough for a quick read, while also providing content you can revisit and study.
Today’s theme is “Slashing.”
Please watch until the very end!
In the world of web3, mistakes are punished. For example, if a validator breaks the rules, the tokens they staked as collateral are confiscated—this is called slashing.
Many may perceive this as rule by fear, but that is not the case. Slashing is an extremely rational and necessary safety mechanism for maintaining order in a world where no one trusts anyone.
Why Systems Relying on “Goodwill” Fail
In the real world, many systems are designed on the assumption of human goodwill. Bank tellers are trusted not to embezzle customer funds. Doctors are trusted not to harm patients. However, this trust only holds because of mechanisms for surveillance and legal penalties.
So, are humans truly sincere? For instance, a small number of people harboring even slight ill will can destroy the entire system. Spammers, scammers, and those who engage in bribery will always exist.
Security design cannot be based on the assumption that people are inherently good. Rather, systems must be built on the premise that all participants will seek to maximize their own interests. This is the essence of “trustless.”
The mechanism of “punishment” that exists in the real world
The real world has already perfected its system of punishment. Laws penalize violators. Contracts stipulate penalties for breach. Companies dismiss employees who commit misconduct.
All these penalties are actually the cost of maintaining order. Without penalties, no one would bother to follow the rules. Penalties are a mechanism that supplements trust and are essential for the system to function.
In the real world, the state acts as the central authority enforcing punishment. The police arrest thieves, the courts pass judgment, and prisons isolate criminals.
However, blockchain has no such central authority. So who enforces penalties? The answer lies in the economic incentives themselves.
What are validators promising in PoS?
In blockchain Proof of Stake (PoS), validators bear the responsibility of safeguarding the network’s security. They enter into an implicit contract to “continue validating correctly.”
Staking serves as collateral for this contract. Validators deposit a certain amount of tokens and receive rewards in return. Without staking, validators would have nothing to lose by maliciously attacking the system. However, with staking, attempting an attack would result in the loss of their own assets.
Furthermore, validators are also responsible for remaining online on the network. Excessive downtime will also subject them to slashing. This means validators are constantly monitored, and their obligation to comply with the rules is enforced at the system level.
What is Slashing?
What is actually slashed is the validator’s stake—that is, the tokens deposited as collateral. There are several actions that can trigger slashing.
The most critical issue is double-signing. If a validator signs two different blocks at the same block height, it directly threatens the network’s security. Such actions are deemed intentional attacks and result in severe slashing penalties.
Next, prolonged offline periods are also subject to slashing. If a validator disappears from the network for a certain period without notice, block validation stalls and the entire network becomes dysfunctional. In this case, the slashing amount is not as severe as for double-signing, but it is definitely deducted from rewards.
The crucial point is that slashing is not merely a fine. If it were just a fine, wealthy individuals could pay any amount and continue their misconduct. However, slashing confiscates tokens, so losing them could mean losing eligibility to participate in the system altogether.
Why the strong design of “confiscation”?
A light penalty does not provide sufficient deterrence against malicious attacks. If the benefits gained from an attack outweigh the penalty, a rational actor will choose to attack.
Therefore, Web3 was deliberately designed to make attacks prohibitively expensive. Slashing ensures that attempting an attack will inevitably result in significant losses. This makes economic rationality itself the mechanism that suppresses malicious intent.
Validators face a simple scenario: “Act correctly to earn rewards, or cheat and suffer losses.” This scenario underpins the system’s security.
Who is Slashing protecting?
Slashing is not merely punishment; it protects many people.
First, it protects the entire network. If a malicious validator distorts validation, all transactions on the blockchain become untrustworthy. Without slashing, there is no means to counter such attacks.
Next, we protect honest validators. If malicious validators can reap rewards, acting honestly becomes a foolish choice. However, if slashing inflicts losses on attackers, honest behavior becomes relatively advantageous.
Ultimately, all users are protected. It is precisely because blockchain integrity is maintained that users can confidently transfer assets and execute contracts.
Why Slashing Isn’t Needed in Web2
Traditional Web2 systems do not require mechanisms like slashing. This is because a centralized administrator exists, and they act as the enforcers of penalties.
If a bank improperly moves a customer’s funds, regulators will investigate, impose fines on the bank, and revoke its license if necessary. If a doctor harms a patient, the medical board will revoke their license. If a platform violates its terms of service, the government will regulate it.
In the Web2 world, administrators act as “enforcers of punishment.” Slashing is unnecessary and actually gets in the way. This is because administrators can respond flexibly based on their own judgment.
However, blockchain has no central authority. That is precisely why a mechanism exists to automatically and mechanically enforce penalties. Slashing is the necessary alternative in this world without a central authority.
Is the UX getting worse because of slashing?
Many people feel that UX is more demanding when using web3 compared to Web2. The burden on users is significant, including non-auto-recovery, gas estimates, and wallet security.
Slashing complicates this issue. Validator operators become extremely cautious to avoid slashing. Automation and delegation become difficult, increasing operational costs. As a result, the barrier to entry for validators rises, indirectly impacting user experience.
However, this is a trade-off. Prioritizing security compromises UX. Prioritizing UX compromises security. Web3 did not choose the latter.
Trustless transactions are made possible by slashing.
The greatest value proposition of Web3 is “trustlessness.” That is, you don’t need to trust the other party; the system guarantees security.
However, this trustlessness only becomes possible because slashing exists. A design that does not trust good faith—that is, a design premised on attacks—is what generates slashing. And it is precisely because slashing exists that economic incentives maintain order.
Slashing is indeed a harsh mechanism. Yet it is the most realistic and rational solution for maintaining order in a world where no one trusts anyone. This design chosen by web3 can be seen as the result of looking squarely at human nature.
That concludes our explanation of “Slashing”!
Disclaimer：I carefully examine and write the information that I research, but since it is personally operated and there are many parts with English sources, there may be some paraphrasing or incorrect information. Please understand. Also, there may be introductions of Dapps, NFTs, and tokens in the articles, but there is absolutely no solicitation purpose. Please purchase and use them at your own risk.
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mitsui
A web3 researcher. Operating the newsletter "web3 Research" delivered in five languages around the world.
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The author is a web3 researcher based in Japan. If you have a project that is interested in expanding to Japan, please contact the following:
Telegram：@mitsui0x
*Please note that this newsletter translates articles that are originally in Japanese. There may be translation mistakes such as mistranslations or paraphrasing, so please understand in advance.