Slashing

How slashing works in the KYVE protocol.

Why slashing is necessary

In order to validate blocks, validators have to validate data uploaded to Arweave by the uploader. To keep network participants incentivised, every participant will receive a reward for their work. But what prevents an uploader or a validator from behaving in a bad way, e.g voting wrong or even upload invalid data? The answer is slashing. Whenever a participant misbehaves (voting incorrect or uploading invalid data) a node receives a point. It can be viewed like a yellow card in soccer and should serve as a warning. When a node misbehaves again and it reaches 5 points a node gets slashed. A slash implicates the loss of the entire collateral a node had to stake in order to participate as a node. Those funds are then transferred to the treasury.

How can I prevent slashing?

As a node owner, you can prevent slashing by simply behaving correct, that means using our prebuilt nodes out of the box, without modifying the behavior of it. Furthermore, disabling autorestart also prevents slashing, because once a node receives a point, it exits to protect your collateral.