Penalties

Penalties can also occur for PoS validators who act outside of the rules set by the network. Commonly known as “slashing,” this is designed to deter bad actors and can result in the partial or complete confiscation of a validator’s stake. In extreme cases of malicious behavior, validators can be removed from a network altogether.

The particulars of slashing penalties vary across blockchains and are defined within the protocol’s rules.

By rewarding honest validators with incentives and penalizing dishonest actors, blockchain networks use principles from game theory to effectively and autonomously maintain the integrity of their information. This allows blockchains to use predefined rules to autonomously secure records without the need for intermediary institutions.