Staking and Slashing

Definition ∞ Staking and slashing are fundamental mechanisms in proof-of-stake blockchain networks designed to secure the network and incentivize honest behavior. Staking involves locking up a quantity of cryptocurrency as collateral to participate in transaction validation and earn rewards. Slashing is the punitive measure where a portion of a validator’s staked assets is confiscated if they act maliciously or fail to perform their duties correctly. This system promotes network integrity.
Context ∞ Staking and slashing are central to the security and economic design of many modern blockchain protocols, including Ethereum 2.0. The mechanisms are critical for maintaining decentralization and resistance to attacks. Debates often focus on the optimal parameters for slashing penalties to deter misconduct without disproportionately harming validators due to technical errors. Understanding these concepts is essential for comprehending the operational stability of proof-of-stake digital assets.