Steemit Crypto Academy Contest / S12W5 - Understanding Slashing In Crypto

Assalamualaikum everyone!

Welcome to the post. Hopefully, all of you will be doing well and enjoying the time with the grace and blessings of Almighty Allah. Today, I'm here to be a part of the week 5 contest in our beloved SteemitCryptoAcademy community. The topic of discussion for this week is very much interesting, Understanding Slashing In Crypto. So, let's start the discussion without any wastage of time.

Use your own words to define what is slashing in Crypto. And do all Blockchains apply to slash?

All of us are well aware about the meaning of the word, Slashing. It means to cut down something or to reduce something. It is mostly used in the cooking process where we have to cut down different things or remove particular parts of various vegetables or fruits.

So, the same is the concept of the word Slashing in the crypto space. Slashing in cryptocurrency means to cut down some of the tokens or assets of the stakeholders of the platform. These stakeholders are actually the main influencers of the platform which are also known as the validators on particular blockchain protocol.

The removal of some of the funds in the form of tokens or assets from the validators of the platform is actually a type of punishment which is given to the abusers of the platform. Whenever a stakeholder/validator commits any wrong activity then he is punished by the process of slashing.

The wrong activity or misbehave of the validators could be in any form including the double singing of a block at same height, colluding with other validators to attack the network, verifying the invalid blocks, or staying offline for so much time. These few reasons could be the cause of slashing in the crypto blockchain technology.

Do all Blockchain use Slashing?

We are well aware about the fact that the stakeholders are actually the validators in the blockchains which are based on the Proof of Stake (PoS) mechanism. So, it's obvious that the slashing mechanism is only applicable in such blockchains which are based on the PoS algorithm.

The blockchain platforms which are based on the other consensus algorithms like PoW, DPoS, PoB, and so on.. cannot implement the mechanism of Slashing. This is because the validators have to stake their tokens in the Proof of Stake blockchains only, other blockchains do not require this thing.

So, in short words we can say that the slashing mechanism can only be implemented in the PoS blockchains. The stakeholders/validators lose a portion of their staked tokens if they are against the rules and regulations of the specific blockchain platform.

Explain how slashing protects the blockchain, taking an example of a blockchain that applies it.

As I have already explained that slashing is a mechanism in which a portion of the staked tokens of the validators are lost due to the involvement of those validators in the malicious activities. Due to the loss of their staked tokens, they will remain attentive and hence contribute towards increasing the security of the platform.

Taking into account, the severity of the malicious behavior, the validators are penalized by the lost of an amount of the their staked tokens on the blockchain. The amount of tokens that are slashed is already fixed for each malicious behavior. Some slashing scenarios are discussed below.

• If a validator will double sign a block it means that it has validated two blocks at the same height and this will cause the splitting of chain and thus make it difficult to process the transaction.

• If a validator colludes with the other validators of the chain, it can also lead to various disturbances in the network. This may also lead to the double spending scenario.

• If a validator has validated an invalid transaction then it will lead to the spread of the wrong information on the chain and hence lead to the difficulty in validating the transactions.

Due to the occurrences of these slashing scenarios, the validators may lost a portion of their staked tokens and this will ensure that the validator will not involve in malicious activities and thus work honestly for the beneficial of the blockchain.

Now moving towards the Examples...

As I have already said that the blockchain platforms that are based on the Proof-of-Stake mechanism mostly implement the slashing mechanism to punish the validators who are involved in the malicious acts. Some of the examples of the blockchains that use slashing are as follow.

• Ethereum
• Avalanche
• Polkadot
• Solana
• Cardano

Now, I will select the Ethereum network to explain the examples of the slashing scenarios that are explained above. For example, if a validator is involved in double signing, he will lost 1 ETH, if one is involved in the colluding with other validators then he will lost all of his staked tokens and so on.

Ethereum is a blockchain platform which is based on the proof-of-stake mechanism and it requires the validators to stake 32 ETH tokens to become a verified validator. So, if a validator is involved in the malicious scenario then he will lost his staked tokens accordingly.

As a blockchain user, how can you avoid slashing?

If we are a user of a blockchain which is based on the proof-of-stake mechanism, we should always try our best to avoid the slashing scenarios. Being a responsible and wise Blockchain user, it is our responsibility to check and research the validator completely before making any delegation or vote to that validator.

We should check out the history of the validator whether the validator is verified or not. We should also check if the validator is involved in any miscellaneous activity before. Another important way to avoid such things is that we should always prefer those validator who are verified on the chain and have an active status.

We should avoid delegating to the inactive and irresponsible validators. Moreover, the server on which the validator is processing should be updated and active. So, these things are very much important to take into account before delegating to any validator.

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?

If we talk about the present time, the Steem blockchain does not apply any slashing scenario. This is because of the fact that the Steem blockchain is actually based on the Delegated Proof of Stake mechanism while the slashing mechanism can be implemented in the proof-of-stake blockchains only.

On the Steem blockchain, the validators are actually known as the witnesses and these witnesses are selected on the basis of the upvotes from the stakeholders on the Steem blockchain. The more the staking of a voter, the more will be the influence of the vote. In this way, it is called as DPoS mechanism.

But if we talk about the implementation of the slashing mechanism on the Steem blockchain then obviously there are some benefits, as well as, drawbacks. The most important benefits of slashing on the Steem blockchain will be that it will improve the security of the platform.

Another benefit is that the slashing mechanism will tend the witnesses to work honestly and for the betterment of the Steem platform. But the drawbacks are also present including the discouragement of the users to stake STEEM tokens, a bit involvement of concepts of centralization and something like that.

I am sure that the Steemit team will take into account all the possible gains and drawbacks before implementing the slashing mechanism on the blockchain because it requires a lot of controversial discussion and argumentation.

What are the advantages and limitations of slashing?

Slashing is a method of punishing the validators for their wrong dealing or misbehavior. There are some drawbacks, as well as, benefits of slashing which are discussed below.

• The most important advantage of slashing is that it deter the malicious behavior from the validators of the platform by punishing them. So, this thing can act as a threat for the all other validators of the platform.

• Another important gain of the slashing mechanism is that it also improves the security of the blockchain as the validators are punished and they avoid the abuses like double signing, colluding and so on..

• Moreover, the slashing mechanism can also help to develop the feeling of honesty in the validators. The validators work honestly for the betterment of the platform.

• The most notable drawback of the slashing is that it can also penalize the non-deserving validators unfairly due to the minor mistakes or technical issues.

• This thing can also discourage the stakeholders and restrain them from staking as they always have a threat of unfair slashing.

• Slashing mechanism can also develop an environment of centralization which is also a great drawback of the slashing mechanism.

Conclusions

Slashing in the crypto space means punishing or penalize the validators for their malicious behavior which is against the rules and regulations of the platform. In the slashing scenario, some of the staked tokens of the validators are lost. It is implemented only on the blockchains which are based on the Proof of Stake (PoS) mechanism.

I would like to invite my friends @malikusman1, @sahar78, @dove11, @artist1111 and @aaliarubab to be a part of this amazing contest.