What is slashing? How does Bison Trails minimize slashing risks?
Slashing—a mechanism built into Proof of Stake blockchain protocols to discourage validator misbehavior—is designed to incentivize node security, availability, and network participation. The two key misbehaviors that incur slashing are downtime and double signing. While the specifics of slashing are defined within each protocol, the mechanism is similar: a predefined percentage of a validator’s tokens are lost when it does not behave consistently or as expected on the network. Double signing penalties are typically much larger than downtime penalties.
Polkadot and eth2, among other networks, incentivize decentralization and security with correlated slashing. Correlated slashing means that slashing penalties escalate based on the percentage of total validators participating in the behavior (downtime or double signing) at the same time. For example, if 25 out 200 validators are down, the slashing penalty is smaller per validator than if 50 out of 200 are down.
Downtime occurs when a validator is unavailable to sign transactions on a blockchain for a certain period of time. Expectations for the uptime of a validator are dependent upon the protocol. If a node remains unavailable for long enough, it may be subject to penalties, including slashing.
Downtime often occurs if a node’s cloud infrastructure goes offline or a node is out of sync with the chain. Not all protocols consider downtime a slashing offense.
Double signing occurs when a validating entity (private key) submits two signed messages for the same block. This behavior may occur if a node operator, or infrastructure provider, optimizes their node configuration to prevent downtime by having a highly available backup entity running at the same time as a primary entity.
Many Proof of Stake protocols penalize double signing because this validator misbehavior makes it more difficult for the network to reach consensus. Consensus—how nodes on a network verify transactions and their order in a decentralized blockchain network—is a critical step to prevent invalid data being written to the ledger, the record of all transactions.
The slashing penalties for double signing can be very dangerous for anyone participating with their stake in a network: token holders and validators can lose existing funds, not just miss out on future rewards.
Under development for the better part of a year, Bison Trails’ Double Signing Protection software addresses one of the biggest risks of participating in a Proof of Stake blockchain network: slashing penalties if a validator double signs blocks. With Double Signing Protection, it’s now much safer for anyone using Bison Trails’ infrastructure to participate in supported networks.
Bison Trails’ Double Signing Protection was designed to address the need to minimize the cost of losing stake and reductions in rewards for customers running a node—on networks like Tezos that have double signing penalties—in order to minimize the risks of participation and further professionalize blockchain infrastructure service for our customers.
“Without double signing software, operators have to be careful or run scripts that check that they haven’t made a mistake. Bison Trails’ double signing protection provides guarantees and tooling for our response teams to be able to more confidently failover, ensuring high uptime without the risk of double signing.” —Aaron Henshaw, CTOLearn More
Bison Trails is a blockchain infrastructure company based in New York City. We built a platform for anyone who wants to participate in 20 new chains effortlessly. We also make it easy for anyone building Web 3.0 applications to connect to blockchain data from 30 protocols with QT. Our goal is for the entire blockchain ecosystem to flourish by providing robust infrastructure for the pioneers of tomorrow.