Slashes are punished by incorrect work of the masternode (validator).
There are 2 types of slashes:
1% of the total stake of the validator;
5% of the total stake of the validator.
Failure to sign a validator in 12 of the 24 most recent blocks is slashes with 1% of the total validator stake. That is, if the validator node is in the blockchain in an activated state (Set Online), but for some reason has not signed the blocks. For example, due to an unreliable Internet connection. 12 of 24 blocks in any order. The total amount of the stake includes all the funds delegated to this validator and his personal funds.
To prevent this slash's, Decimal has prepared a special service - Decimal Guard. Installation instructions are here. This service monitors the block signing process for a particular node and, if necessary, sends a Set Offline transaction that deactivates the masternode before it is penalized. Guard fires at the specified skip block threshold, which is configurable. The Set Offline transaction is created and signed in advance, and when Guard is triggered, it simply sends it to the network. The next deactivation will require a new transaction stored in Guard.
Validators who attempt fraudulent actions in the process of establishing consensus are also slashed. Namely, when signing 2 different blocks of the same height during the rounds of verification and voting for a block of candidates. That is, when signing two versions of the same block.
The consensus mechanism procedure is presented in Yellow Paper page 13.
This is a serious violation that can lead to blockchain forks. In the event of a fork, some network users will focus on one version of the blockchain state (transactions, account balances), while the other part of the users will focus on the second version of the blockchain with a different state and balances.
In this case, the validator will be penalized with a 5% slash's. User funds are not decoupled from the slashed validator. But the validator node is forcibly deactivated. To return a node to the validator system and participate in the consensus, the validator must reactivate the node (transaction Set Online).
- No signature for 12 blocks out of the last 24 blocks - slash's for 1% stake + validator deactivation;
- Double signature - 5% slash's on the total stake and deactivation of the validator.
A more detailed and detailed description of the double signature attack is described in the Tendermint documentation (English).
The amount of the slashes (1% or 5%) is permanently burned, reducing the issue of the corresponding coins.
Rewards and slashes are distributed in proportion to the share of the delegator's funds in the total validator stake. If the validator receives a 5% slash's, then the delegator will receive the same 5% slash's automatically.
The delegator is personally responsible for his choice of validator, so this choice must be made very carefully.