Consensus Check- #REI DAO #6 Proposal # REI DAO HardFork: Slash Mechanism Optimization


2% of the circulating supply (750 million). The purpose of this quorum is to ensure that the only measures that pass have adequate voter participation.

Proposal background

The PoS consensus mechanism has increasingly become the mainstream in the design of the public chain consensus mechanism after Ethereum transformed itself into the PoS mechanism. After several years of practical tests, the DPoS mechanism of REI Network has been quite perfect, not only in the design of the mechanism but also in the decentralization and operation, which is closely related to the self-evolution and iterative optimization of REI Network. As the underlying punishment mechanism of the public chain, the Slash mechanism plays an important role in the security of the PoS-based public chain and the stability of the operation. It is also an on-chain mechanism that almost all PoS public chains adopt. Slash, as a necessary requirement for stable, healthy, and sustainable development was introduced into REI Network in the year 2021, and it has been in operation so far, providing a guarantee for the safe and stable operation of REI Network. In December 2022, LOVE-REI, one of the validators on REI Network started two miner programs at the same time, which led to double signatures at the same block height, which triggered the Slash mechanism, resulting in 20% of the total votes staked by LOVE-REI, totaling 562,242.6 $REI (includes votes from the validator itself and community users) was slashed. That is, when a validator is found to be malicious, 20% of the votes staked by the validator will be fined and slashed to the black hole address.

REI Network Foundation received a lot of feedback from the community after slashing LOVE-REI, saying that they couldn’t understand the high penalty, and they think that there is room for discussion and optimization of the Slash mechanism. After carefully listening to the user’s feedback and fully communicating with the community, REI Network, the community-centered public chain think that this slash’s educational significance to the community and LOVE-REI has contributed to the development of REI Network network for a long time, so REI Network decided to provide relief compensation for the votes confiscated from community users in this slash and improve the Slash mechanism in the next hard fork upgrade. In line with the principle of decentralized governance, the handling of LOVE-REI slash compensation and the upgrade of the Slash mechanism will be decided by community voting.

Specific goals

  1. The Slash mechanism of REI Network will be optimized after this incident so that the mechanism can better play a role in the safe and stable operation of REI Network in the future.

  2. Listen to the opinions of the community on the LOVE-REI confiscation compensation and the upgrade of the Slash mechanism, so as to ensure that every $REI holder can fully realize their on-chain governance rights to the REI Network.

  3. Further deepen $REI holders’ professional understanding of the PoS mechanism, and enable more community supporters to become more professional on-chain crypto citizens while realizing on-chain governance.

Necessary decision

  1. The REI DAO hard fork will upgrade the REI Network Slash mechanism. The content includes: How to set the proportion of the fined amount? Is the slash mechanism of the mainstream PoS public chain in line with the development of REI Network and how can it be adjusted to better suit the growth of REI Network?

  2. The slashed funds from voting users on the LOVE-REI validator will be refunded in a derogatory manner, which will be temporarily borne by the REI Network Foundation before the next hard fork-「REI DAO」HardFork. After the next hard fork completes, the slashed funds of users will be returned to the foundation address. Considering the stability and security of the network, 50% of the slashed funds from LOVE-REI will be returned, and if there is no safety problem on the validator within one year, the remaining 50% will be returned.

This decision is based on the feedback from community users and fully considers the warning significance of the LOVE-REI node slashing event for the operation of REI Network validators. As a public chain that is fully governed by users, all developments of REI Network fully reflect the community users’ will.

The specific content of Slash mechanism Optimization

The original Slash mechanism of REI Network is based on the underlying structure of the PoS consensus public chain. Once a validator does evil (regardless of whether the validator has subjective evil awareness), it will trigger the slash smart contract, and 20% of the votes staked by the validator will be confiscated. Super nodes are obliged to maintain long-term monitoring of validator operation, and REI Network Foundation has no responsibility for the long-term monitoring of validator operation.

However, considering the current community validator operating capabilities and suggestions from community users, the specific contents of the upgraded Slash mechanism will be as follows:

1) Objects to be slashed

The Slash mechanism is to slash all the votes staked by the validator, which is the underlying set of the Slash mechanism of all PoS public chains as the development of the validator is not only directly related to the validator itself but also related to the community supervision. For a validator with insufficient qualifications and capabilities, community users have the right and the obligation to identify and decide whether the validator will exist or not through voting. PoS staked voting itself is a behavior with both risks and benefits, users should conduct basic research on the validator before voting for it because voting for it means bearing risks with it.

2) Amount to be slashed

The penalty ratio of REI Network’s original Slash mechanism is 20% of all the votes of the validators. Most community users think that this ratio is too high, especially for some non-subjective behaviors that do not actually harm the development of the REI Network network, 20% penalty ratio are unreasonable. So the penalty ratio of the upgraded Slash mechanism will be determined by comprehensively considering the degree of harm to the network and user voting:

  1. If the validator causes great harm to the network, like fork due to a double signature, then all the votes staked by the validator will be fined according to the actual loss, up to 100%.

  2. No harm has been caused to the network, and the validator is an active promoter and supporter of long-term network development. It is not a subjective behavior for the validator to do evil, but because of some force majeure or objective factors, then the validator will be confiscated 1-10% of its votes, and the specific amount will be decided by all $REI holders.

3) Execution method of slash

The original Slash mechanism of REI Network is executed by the smart contract, and the slashed $REI directly enters the black hole address, which is difficult for most community users to understand and affects the enthusiasm of community users to vote.

The improved Slash mechanism will upgrade the execution method. All slashed votes will be frozen and cannot be withdrawn. REI Network Foundation and the community will jointly observe and judge whether the malicious behavior has caused network losses. After grading the degree of harm, the community votes will determine the final penalty ratio, so that the Slash mechanism of REI Network will be more in line with the actual situation of REI Network.

4) The whereabouts and uses of REI slashed after the upgrade of the Slash mechanism

After the community voting, the slash ratio will be determined, and the slashed REI will be entered into the multisig wallet address managed by the community governance committee and then returned to the voting users, encouraging community users to actively participate in community governance.