The Slash mechanism provides a method for the PoS public chain to impose economic penalties on validators that violate the block-producing rules. The result of the punishment is to take away part or all of the staked rights of the validator to maintain the safe and stable operation of the entire network.
The Origin of Slashing
The slash mechanism has a long history. As early as 2014, Vitalik, the founder of Ethereum, discussed the benefits of the slash mechanism in the article “Slasher: A Punitive Proof-of-Stake Algorithm”, saying that “the Slash mechanism can ensure that every each validator only signs one block on each block number.” After the launch of Ethereum 2.0, the slash mechanism was launched at the same time. When the validator violates rules in the Ethereum, slashing will occur. When the behavior of the validator may confuse or destroy the integrity of the system, part of the existing staked amount of the validator will be “confiscated” until the validator is forcibly expelled from the validator ranks and marked as “SLASHED”, client misconfigurations can also result in slashing.
The Cosmos ecosystem built the first efficient implementation of slashing into its BFT consensus protocol, which enforces slashing when validators do not participate in proposing blocks or double-sign ambiguous blocks.
REI Network has also introduced the Slash mechanism since its upgrade and iteration in the year 2021, and in December 2022, due to the improper operation of LOVE-REI, the validator on REI Network, the first slashing occurred: https://twitter.com/GXChainGlobal/status/1603791734168686596. After the confiscation, in view of the reaction of the REI Network community, REI Network proposed REI DAO#6 proposal for the community to upgrade the slash mechanism to make it more in line with the community’s willingness and needs of network development. Here we will help you to understand the REI DAO #6 proposal voted by the community — how the upgraded slash mechanism of REI DAO and the customized slash mechanism will improve the security of the REI Network.
Advanced Slash Mechanism — More Targeted Punishment
Validators participating in the PoS consensus mechanism must stake a certain amount of tokens as a condition for starting a node. The starting condition for REI Network is 100,000 REI. On this basis, validators need to actively seek community votes to increase their staking rate and block-producing rate to increase rewards.
In the original slashing mechanism of REI Network, validators may be punished for making ambiguous proofs or proposing ambiguous blocks. It is also difficult for the validator to prove whether he is subjectively willing to do evil, so the validators who do evil will be confiscated 20% of the total rights and rewards of the node staking, including the staked voting and community voting.
After the upgrade of REI DAO, the customized slash mechanism will be more gentle, and the punishment will be carried out according to the situation:
If it causes great harm to the network, for example, if the blockchain is forked due to double signature, then all the votes staked by the validator will be fined according to the actual loss, up to 100%.
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 because of some force majeure or objective factors, whether to confiscate the validator and the amount of confiscation will be decided by all $REI holders voting through the REI DAO proposal.
The adjustment of the confiscated object and the amount can not only fully reflect the will of the community, but also increase the cost of evildoers, reduce the loss of innocent validators that unintentionally trigger the slash mechanism, and ensure a more stable operation of REI Network. Generally speaking, under the original slash mechanism, innocent validators may be punished disproportionately due to unintentional mistakes (such as misconfigured keys or lost keys), the upgraded slash mechanism will reduce the worry of node staking.
Where the Slashed Funds Go — Compensating Victims
In the common Slash mechanism, the slashed funds have the following two destinations:
Destruction: The direct way to deal with confiscated funds is to destroy them directly. Before the upgrade, REI Network’s slash mechanism directly transfers the confiscated funds into the black hole address through the smart contract. Assuming that the total value of tokens has not changed due to validator attacks, the value of each token will increase proportionally and will be more valuable than before, and other token holders who are not punished for the evil of the validator can benefit from it.
Insurance account, which is a more direct way to motivate stakers and voters who have not done evil. At present, there is no governance method adopted by the PoS public chain, and REI Network is actively exploring it. If the validator does evil, it will be slashed according to the actual loss amount on the chain, and these assets will be returned to the lost user in full; if the confiscation does not cause actual losses to the chain, the confiscation of the validator will be determined after the consensus of the community voting, and the slashed REI will be entered into the Multisig wallet address managed by the validator governance committee, and then airdropped to users who actively participate in community governance according to the proportion.
The PoS protocol without a slashing mechanism is extremely vulnerable to network attacks, while those with a slashing mechanism can improve network security. Currently, the slash mechanism adopted by REI Network still refers to the general PoS public chain, which has certain flaws. However, with the help of the community, we have proposed some possible methods to mitigate the defects and build a slash mechanism that is more in line with the interests of the community. We hope that Slash Mechanism can better improve the security of the entire ecosystem.