Mainnet Milestone: Slashing Mechanism Finalized

As we approach mainnet, scheduled for September 20th 2024, we will have multiple deliverables, upgrades, and releases. 

In this update, we are pleased to share the news of our slashing mechanism, which includes both hard and soft slashing, and is designed to disincentivize behavior that is detrimental to the Dusk network. 

This is particularly relevant to our provisioners, so that they can be informed about the potential punishments and how to avoid them.

What is a Provisioner?

A provisioner is a specific type of node role in the Dusk network that participates in the consensus process. Provisioners are responsible for validating transactions, producing blocks and maintaining the network’s security. Unlike other node roles, provisioners have an active role in consensus and can be subject to slashing penalties.

For an in-depth and more technical explanation, please refer to our soon-to-be expanded documentation.

This article will be broader and more general, while the documentation will be a must-read for node operators. 

What is slashing?

Slashing refers to the mechanism in place to encourage good behavior and discourage bad behavior in node operators on a Proof-of-Stake network. 

At Dusk, we have two types of slashing: Hard and Soft Slashing.

This dual system is designed to ensure the network functions reliably and quickly, deter and punish malicious behavior without overly penalizing inactive or unreliable nodes.

The two systems allow us to exclude low performing nodes from the system, while punishing malicious ones. 

Soft Slashing

When does it occur? 

Soft Slashing currently occurs when a node fails to produce a block. Doing so slows down the network, and as such is discouraged but is not considered malicious.

What is the mechanism?

First there is a warning, and for every subsequent infraction the node in question will have N x 10% of its stake removed and moved to its Rewards amount. The node is also excluded from the consensus for N epochs (where N is equal to the consecutive slash occurrences) before being included again in the eligibility to vote/produce blocks, and thus receive rewards. 

The stake is not lost, but it is no longer part of the staked amount for the node, reducing its size, and likelihood of being picked as a voter or block generator. 

Note that warning and faults are only reset when the provisioner gets a reward, meaning it participated in the consensus by producing a block or voting on one.

The 10% increase continues until there is no more stake left or the stake falls below the minimum 1000 DUSK. The amount that is removed can always be reclaimed by withdrawing the reward amount and can be unstaked and restaked should the node operator choose to do so. It is not lost, it is just removed for the active stake of the node. 

Soft slashing essentially reduces the likelihood of a node receiving rewards, but doesn’t take anything away. 

Reducing the active stake of the inactive provisioner, we reduce their probability of being selected which in turn gives us a higher probability of selecting online provisioners during the consensus. In this way, the mechanism aims at maximizing network efficiency rather than punishing provisioners. 

Hard Slashing

When does it occur?

Hard Slashing is more serious (!) and occurs when a node operator engages in behavior that is considered malicious and actively detrimental to the network. 

The infractions that incur Hard Slashing are:

• Producing an invalid block (10% burn)
• Double voting, i.e., emitting two different votes for the same candidate block (20% burn)
• Double block production, i.e., producing two different blocks at the same iteration (20% burn)

What is the mechanism?

The result is to burn a percentage of the node’s stake, depending on the severity of the action. Producing an invalid block is considered less serious, while double voting and block production are considered attacks on the network. 

Nodes are also suspended N for epochs, where N is the number of consecutive faults but unlike soft slashing, there is no warning.

Next steps for node operators

Node operators should carefully refer to the upcoming documentation overhaul for a more detailed breakdown of Hard and Soft Slashing and to ensure that their nodes perform well. 

The updated documentation will also provide information on staking and rewards.