What is slashing in ETH2 network, why its used and How StaFi rETH deals with the ETH2.0 Slash problem.
Whats ETH2.0 slashing
firstly Slashing means the deduction of staked ETH due to disconnection or malicious behavior of validator nodes. One of the most well-known risks with becoming a validator is the potential to incur slashing fees.
It’s important to recognize that validators only incur slashing fees when they maliciously attack the network. This could be through double voting, an action where a validator votes on two different blocks during the same epoch, meaning they are trying to support two different versions of the chain at the same time. In broader crypto terms, this is known as the “double-spend attack”.
Slashing also is considered a more severe penalty, and it entails the burning of some amount of validator funds and immediate ejection from the active validator set. This happens if a validator, for example, creates two beacon blocks in one epoch, or if they try to attack or compromise the network. “Although being slashed has serious repercussions, it is simple enough to avoid being slashed all together by remaining consistent with respect to the messages a validator has previously signed.
Why its used
Most times Being slashed means that the validator is forced to exit the beacon chain at a point in the future, receiving a number of penalties until it leaves. slashing serves two purposes:
(1) to make it expensive to attack the network and
(2) to stop validators from being lazy by ensuring that they actually perform their responsibilities.
When the validator is Slashed, assets will be withdrawn directly, and the minimum fine is 1 ETH (lowered when the beacon chain is live). In extreme cases, the 32 ETH principal deposited by a validator may be halved.
According to Beaconcha.in leaderboard shows hundreds of validators already penalized, placing them at the end of the list. The last person on the list is the slashed validator, while those before them are still active, with the second-to-last validator showing an income of -0.0267 ETH since the launch (currently, some USD 16).
So Any validators who correctly follow the protocol will never incur slashing fees, meaning if a user just runs a validator and never intentionally attacks the network (which requires a significant amount of technical knowledge) they’ll never incur this fee.
How StaFi rETH deals with the ETH2.0 Slash problem
Stafi protocol has released a detailed research on how rETH solutions deals with ETH2.0 slash problems.
The design of ETH2.0’s Slash mechanism is to increase the security of the chain. StaFi must also take into consideration Slash when designing rETH product solutions. A reasonable mechanism that ensures the user’s principal is immune is of paramount importance. This is because the user’s funds are deposited into the fund pool through the StaFi contract, and then sent to the validator Pool contract by contract algorithm. During the whole process, the user delegates StaFi to select validators, which is different from the traditional Staker delegation mode.
In the rETH solution, every time an Original Validator of ETH2.0 starts running a node, a certain amount of deposit is required. This deposit will be staked in the ETH1.0 deposit contract along with the stakers’ funds. When the validator is Slashed, the deposit will be deducted, so as to ensure that the user’s funds will not be deducted for the misbehavior of the validator.
In the ETH2.0 world, the maximum amount of Slash from the principal is 16 ETH if there are no more than ⅓ validators getting slashed at the same time . Therefore, the theoretical validator deposit without further thinking required by the StaFi rETH solution will be 16 ETH under normal situations.
In addition When participating in Ethereum 2.0 Staking, the Slash problem is also hard to ignore, To cope with this challenge and further ensure staker interests, the following will be implemented:
1) Original Validators who join the rETH plan will be required to commit a certain amount of ETH as a deposit, and whenever a slash occurs the relevant deposit will be deducted to cover the loss from stakers.
2) Staking Contract will assess original validators’ historical track record and only elect to match staking funds with original validators who haven’t been slashed before.
3) Staking funds will be matched with multiple Original Validators in order to diversify risk and avoid single point of failure. Therefore, even if a certain Original Validator is Slashed (which is highly unlikely), it will not have a major impact on the staking funds pool.
StaFi team has proposed that this risk can be resolved by an insurance pool for Slash. If a validator joins in the insurance pool, once Slash occurs, the loss shall be borne by the deposit paid by the validator if it is lower than 8ETH, and if not, the insurance pool shall bear it.
The insurance pool is an important module in the product design of the rETH product. Its mission is to help validators resist Slash risks, thereby facilitating the adoption of rETH.
About StaFi Protocol
StaFi is the first DeFi protocol unlocking liquidity of staked assets. Users can stake PoS tokens through StaFi and receive rTokens in return, which are available for trading, while still earning staking rewards. FIS is the native token on StaFi Chain. FIS is required to provide security to the network by staking, pay for transaction fees on the StaFi chain, and mint & redeem rTokens.
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