Steemit Crypto Academy Contest / S12W5 - Understanding Slashing In Crypto
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Slashing doesn't seem like a new word to most of us, as we've heard statements like "the price of the goods was slashed", "they slashed my pay" etc. The same proceeding occurs in the blockchain network and that is what our discussion is based on this week.
Use your own words to define what is slashing in Crypto. And do all Blockchains apply to slash? |
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Slashing in English means cutting out or slicing, that is to say, it is the act of cutting something off or removing a piece of something from a whole. Like removing a slice of Pizza from a full. Therefore, the slashing mechanism of the Crypto world borrows this idea.
Slashing is a mechanism used in some blockchain networks to discipline or penalize validators (i.e. the nodes responsible for validating or authenticating transactions and adding them to the blockchain), also known as network participants, by removing or taking away some of their staked tokens for any malicious behavior or for not following the rules and regulations of the blockchain.
By losing a portion of their staked tokens, it is hoped that it serves as a way to ensure that these validators act in the best interests of the blockchain and do not engage in any activity that could harm the network hence maintaining the security and integrity of the network.
Validators are given the responsibility to maintain the security and integrity of the network, hence they are rewarded with incentives to act honestly by earning rewards and transaction fees for their services.
The punishment of slashing depends on the specific blockchain network, but since it involves reducing the validator's staked funds or bond. It means validators are needed to stake a certain amount of cryptocurrency as collateral to participate in the network.
It is this staked portion of their funds, token, or bond that is slashed, or taken away If they violate the network's rules. A validator's entire staked tokens may be slashed, based on the severity of the malicious act, effectively removing them from the network.
Therefore, this explains that only blockchains that utilize the Proof-of-Stake (PoS) mechanism can apply the slashing mechanism on validators as it is the only mechanism in which validators are expected to participate by staking their tokens.
To this effect, blockchains that run on the Proof-of-Stake Mechanism such as Ethereum, Cosmos, Polkadot, Cardano, and Tezos are some of the blockchains that utilize the slashing mechanism.
Each blockchain mentioned above implements the slashing protocol using sets of rules unique to them, different penalties for each act, and different criteria for detecting these malicious acts.
Explain how slashing protects the blockchain, taking an example of a blockchain that applies it. |
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Slashing is a powerful mechanism to defend the integrity and security of blockchain networks, hence serving as an important element in ensuring the long-term success of a blockchain.
The Slashing mechanism is an important mechanism for maintaining the security and integrity of a blockchain network. It serves as a way of ensuring that validators act honestly and in the best interests of the network.
Slashing also protects a blockchain from attacks such as denial-of-service attacks or double-spending attacks on the network, by punishing validators that engage in such actions.
Hence, slashing is an important tool for maintaining the stability and security of a blockchain network
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Here are some examples of blockchain networks that employ the slashing mechanism, along with their unique implementations, rules, penalties, and criteria:
Ethereum
Ethereum adopted the Proof-of-Stake (PoS) in 2022 (Ethereum 2.0). Therefore, uses the slashing mechanism to penalize validators who acted maliciously or failed to follow the rules of the network. Penalizing validators for double-signing blocks, signing on conflicting blocks, or failing to take part in the consensus process.
Cosmos
The Cosmos blockchain uses a variant of the conventional Byzantine Fault Tolerance (BFT) consensus mechanism, called Tendermint, this employs slashing to penalize validators who are dishonest or failed to follow the rules of the network.
Like Ethereum, Slashing on Cosmo is initiated by actions such as double-signing, signing on conflicting blocks, failing to partake in the consensus process, or failing to validate a block over a long period.
Polkadot
Considered a next-generation blockchain network, it employs the use of a hybrid consensus mechanism that incorporates Proof-of-Stake (PoS) and the variant Byzantine Fault Tolerance (BFT) called GRANDPA.
Validators on this blockchain are slashed for actions such as double-signing blocks, signing conflicting blocks, or signing on blocks for an expired transaction.
Cardano
Cardano uses the conventional Proof-of-Stake (PoS) mechanism. Hence also employs slashing to penalize validators failing to follow the network's rules. Like the earlier mentioned examples, Cardano penalizes for double-signing blocks, creating blocks without transactions, or failing to participate in consensus.
Tezos
Tezos employs a unique Proof-of-Stake (PoS) mechanism that isolates the functions of validators and delegators. However, Slashing is used to punish both validators and delegators who fail to follow the network's rules. However, validators are slashed for double-signing, while delegators get a share of the punishment for the wrong of their validators.
As a blockchain user, how can you avoid slashing? |
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Knowing that no digital system including blockchain is immune to hacking or shortcoming and such an action in blockchain will lead to downtime for individual validators, which will affect the overall network performance. Hence to avoid slashing as a user, it is important to delegate only to reliable validators.
Since there is a possible security threat that any validator who is caught in a malicious act, everyone will be fined (splashed), including delegates. Hence, users should avoid being a victim of an insecure validator which can lead to losing all their staked tokens.
You can also choose to invest in projects that don't employ the splashing mechanism, this way you don't risk being a victim of malicious validators.
Does the Steem blockchain apply this kind of punishment? If not, do you think slashing could be applicable in the first place (technically) and will it be beneficial? |
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No, Steem blockchain doesn't apply the use of the Slash mechanism as a punishment, as Steem blockchain utilizes a hybrid form of PoS, known as Delegated Proof-of-Stake (DPoS).
In the Proof-of-Stake (PoS) mechanism, users become validators when they stake a certain threshold either by their stakes or delegated stakes or attain specific requirements whereas in Delegated Proof-of-Stake (DPoS) all users are given the freedom to choose or elect a representative (witnesses). Hence, I believe their staked tokens can not be affected.
To this effect, technically it will be difficult to implement the slash mechanism as a punishment major on the Steem blockchain as a validator (witness) does not assume that position based on his acquired tokens, and also users don't have to delegate their staked tokens to validators (witness). Instead, witnesses are been voted, while users still hold onto their stakes without transferring to a validator (witness).
On whether this will be beneficial if applied to the Steem blockchain, I believe the Steem blockchain has its measures of punishment for offenders.
If slashing was to be introduced to the Steem blockchain, it would bring with it some drawbacks even as it can serve as a punishment and fight against malicious acts and behaviors.
What are the advantages and limitations of slashing? |
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Below are some advantages and drawbacks of the slashing mechanism
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Upholding Integrity and Security
Slashing serves as an act of security for the blockchain as well as acting as a tool for upholding integrity in a blockchain. It serves as a tool to fight against mischief by validators as it means they would lose a portion of their stakes. This way, it helps to reduce the risk of malicious acts and enhances the security of blockchain.
As a barrier against malicious acts
Slashing serves as a strong barrier against malicious and negative behaviors within a blockchain network as validators are encouraged to act honestly and follow rules to avoid financial penalties which can lead to the loss of their stakes or worse dismissal from the blockchain.
Effective Incentives Rewarding
Slashing is a great mechanism to distribute incentives to validators who are up and doing, as the token removed or slashed from the staked tokens of validators who are found wanting is added back to the reward pool to reward those rightly behaved validators.
Boast Accountability
The slashing mechanism serves as a means to hold validators accountable for their actions hence, encouraging them to be responsible and adhere to the guidelines of the blockchain therefore promoting honesty and hard work in the blockchain.
Slashing as a mechanism may present complications to the blockchain's code and control. Complications such as determining which behaviors warrant slashing and the appropriate penalty may lead to controversies.
There is a risk of validators or participants being punished unjustly due to technical issues of the blockchain such as network glitches in cases of system downtime, which may lead to disputes or damage the prestige of good validators that are not acting maliciously.
Since validators are required to stake or have a large amount of staking to become a validator, those with more staking will eventually have more influence and control over the blockchain leading to concerns about centralization.
Lastly, the fear of users losing all their funds or stakes is another limitation. Users may hesitate to partake in the governing process such as validating or delegating to validators with the fear of losing their precious funds if these validators are penalized.
CONCLUSION |
The implementation, rules, penalties, and criteria for slashing may vary with each blockchain network. Nevertheless, the prior goal is to incentivize users to behave honestly and to prevent vicious actors from sabotaging the network.
I wish to invite @anasuleidy, @ninapenda, @ruthjoe, @drhira and @suboohi
Thank You for your Time
NOTE: Always have a smile on your face, as you are never fully dressed without one.
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You're absolutely correct! Slashing is a crucial mechanism in blockchain networks. It helps maintain the network's security and integrity by penalizing malicious or faulty behavior from validators or participants.
You have explained well each and every topic.
Best of luck for the contest ☺️
As much as it helps maintain integrity on blockchains that utilizes this mechanism, innocent users who has delegated their stakes to validators stand the chance of losing everything due to system down time or a false positive situation, so it is still both ways. Thank you for your support friend.
Hello dear friend!
I really loved the way you have explored the given topic which is all about the slashing in crypto space. It's true that slashing has both benefits and drawbacks. As the slashing mechanism can only be applicable in the blockchains which are based on PoS algorithm, so it's not easy to integrate this mechanism with the Steem Blockchain.
Thanks for your beautiful explanation and good luck ahead 👍
You will always have my admirations as you are one of the users I look up too and learn from. Thank you for time and support.
Saludos amigo sahmie, te felicito, siempre eres constante en entregarnos una buena participación.
Un mecanismo que aplica sanciones a los malos comportamientos es algo muy bueno en mi opinión, pues esto le da a las cadenas de bloques seguridad y robustez.
Suerte amigo.
First of all, I really want to thank you for your time and support, I very much appreciate it.
True it is a very good mechanism as every wrong doer needs to be punished, but there are still possibilities where the innocent delegates get punished too for the bad behaviors they have no idea about.
Hello sahmie.
Exactly, Slashing plays an important role in maintaining the stability of blockchain by discouraging the validators to do any malicious activities.
You have explained well with some impressive examples.
Have a great day ahead!
Thank you for your time and support, it means a lot to me.
Thank you, friend!
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When one realizes that he or she is going to lose something when he or she misbehaves, it helps the person to be more serious and this is just what the introduction of slashing as a way of punishing the validators tends to achieve.
It helps to build sense of belonging even though in most cases, the offenses are not entirely intentional. You have given a wonderful explanation of what slashing is, breathing life into it.
I also agree with you that steem doesn't make use of slashing but delegated proof of stake. But if applied, i believe it can further help.
Thank you for your explanations. Success to you
Thank you for your time and due diligence in going through my entry post. I really appreciate it.
your example that you have explained in very simple words to tell us meaning of slashing is very interesting and agree with you that other word that we can use for slashing is slicing and your example is very mouth watering because you have talked about pizza in it hahaha
If I talk about your concept about slashing mechanism and its use then I extremely agree with you that there are many blockchains that use slashing but there are also some of them that don't use slashing because they have their own consensus protocol. You have also shared examples of some of the blockchains that are using this mechanism and how they are using this mechanism you have also explain it in a very clear explanation
Your methods for avoidance of slashing as a blockchain user are really very appreciate able and I really agree with all of them I wish you good luck and success in your participation good luck to you I hope that next time you would produce good content like this
Your methods are always unique and intriguing nice too. Thank you for your time and engagement, I very much appreciate. All the best mate.
Your example is very easy to understand because I agree with you that if there is a pizza available to you and you cut one piece from that pizza for full feeling your hunger than it means that you are cutting down or you are slashing a piece of pizza as well as if you talk about Crypto world it is cutting of tokens of validators as a kind of punishment due to his malicious activity.
I totally agree with your conclusion which is impactful to me because you have explained in it that slashing varies from blockchain to blockchain but main goal and main purpose to implement this mechanism is to provide security and more honest environment at a blockchain I wish you success and would like in your participation in which you put your maximum efforts.
Wow! Sorry for the late reply, I've been busy for some time now... But in all, I really appreciate your time and efforts to share your meaningful feedback. It means a lot to me.