CUDOS Slashing: A Mechanism to Maintain Blockchain Integrity
Cudos blockchain is building a community of Validators who trust and are willing to support the network. Validators are individuals or organisations who run server nodes on the Cudos smart contract and keep databases of the chain. As participating validators, they propose blocks and validate transactions from apps. To become a validator, the entity must stake at least 2, 000,000 Cudos tokens. To increase validator power, other members of the Cudos community can delegate their tokens to support different validators and share in the commissions they earn.
Despite the good intentions of every validator, there are bad nuts or guys in every society. Not everyone is rational and seeks the interest of the community at all times. To ensure that every validator is committed and contributing to the network, Cudos has integrated the concept of slashing as part of its Vadilator governance.
Slashing is the reduction of the delegated stake of the node runner if they harm the network or fail to meet the server quality requirements. It is important to note that it is not only the 2 million tokens staked that are slashed but the total sum of tokens delegated to the node. For instance, if 4.5 million tokens are staked to back the node, any form of slashing will affect the entire delegated token pool of 4.5million. Slashing can happen for many reasons and the amount slashed depends on the offence. The figure below highlights the key reasons slashing may occur.
- Double Signing — This is meant to stop validators from signing two blocks at the same height on different chains (chains A & B). If both chains share the same ancestor, then the validator tokens are slashed by 5% on chain A
- Downtown- Validator nodes are expected to run and maintain about 99.99% uptime. Where a node is down and misses about 95% of blocks or the last 10,000 blocks, the staked tokens will be slashed by 0.01%.
- No Show in Governance- Validators are like owners of the chain who take decisions regarding the health and direction of the chain in the long run. They are the governors of the chain and if a validator constantly fails to participate in governance decisions, they could be punished and their tokens slashed.
The penalty awarded depends on the severity of the violation. In some circumstances, they are jailed in addition to tokens being slashed. They are released after they have rectified the issues and issued the unjail command to signal they have “purified” themselves and are ready to actively participate. Slashed tokens are sent to the Cudos Treasury and used to support the development of the network.
Cudos is powering the metaverse bringing together DeFi, NFTs and gaming experiences to realise the vision of a decentralised Web3, enabling all users to benefit from the growth of the network. We’re an interoperable, open platform launchpad that will provide the infrastructure required to meet the 1000x higher computing needs for the creation of fully immersive, gamified digital realities. Cudos is a Layer 1 blockchain and Layer 2 community-governed compute network, designed to ensure decentralised, permissionless access to high-performance computing at scale. Our native utility token CUDOS is the lifeblood of our network and offers an attractive annual yield and liquidity for stakers and holders.