Slashing

Slashing — the penalty mechanism of proof-of-stake networks: validators that misbehave, double-sign, or suffer serious downtime forfeit a portion of their staked coins. For a retail staker the risk is small and mostly delegated (you inherit your validator’s competence), but it is a principal risk — one of the reasons staked crypto is not a fixed-income instrument wearing a costume, whatever the yield banner says.

First used in: 2.5 · The speculative sleeve