💸 Penalty Economics: How Much Gets Slashed?
Learn about inactivity leaks, correlation penalties, and fund recovery
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Slashing penalties aren't arbitrary—they're carefully designed to make attacks economically irrational while not being overly punitive for honest mistakes.
Slashing Penalty Calculator
Calculate how much stake would be lost based on violation type and correlation. Correlated slashing (multiple validators at once) results in higher penalties.
Input Parameters
Slashed simultaneously within the same time window
Why Correlation Matters
The correlation penalty is a clever economic design: if many validators are slashed simultaneously (within an 18-day window), it indicates a coordinated attack or systemic failure. The penalty increases proportionally to discourage such scenarios.
Single Validator
Base penalty only. Likely honest mistake or hardware failure.
Multiple Validators
Penalty increases. Could indicate coordinated behavior.
Mass Slashing
Maximum penalty (3× base). Clear attack scenario.
Economic Incentive Structure
Attack Cost Analysis
To attack a PoS network with 1M ETH staked:
- • Need to control 33% = ~333,333 ETH
- • Double-sign attack: Lose ~16,667 ETH (5%)
- • Correlation penalty: Could lose up to 50,000 ETH
- • Plus: ETH price drops from attack
Total cost: $50M+ for minimal gain
Honest Validator Rewards
Operating honestly with 32 ETH staked:
- • Annual rewards: ~4-5% APR
- • No slashing risk with proper setup
- • Compound earnings over time
- • Network security contribution
Honest behavior is profitable long-term
Slashing vs Other Penalties
| Scenario | Type | Consequence | Severity |
|---|---|---|---|
| Double signing | Slashing | 5% stake burned | Critical |
| Extended downtime | Slashing | 0.5% stake burned | Moderate |
| Brief downtime | Inactivity leak | Gradual stake reduction | Low |
| Missed attestation | Missed reward | No reward for that slot | Minimal |
| Slow attestation | Reduced reward | Lower inclusion reward | Negligible |
Design Philosophy
Slashing penalties are calibrated to make attacks economically irrational: the cost of attacking (slashed stake + lost future rewards + ETH price impact) must always exceed any possible gain. At the same time, penalties for honest mistakes (like brief downtime) are kept minimal. This creates a strong economic equilibrium where honest validation is the dominant strategy.