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Lido, a cross-platform betting solution, is facing its first serious sanction after its validators misbehaved.
Lido, a decentralized financial protocol for staking cryptocurrencies, is facing a penalty worth 23 eth (around $35,500) after 20 of its validators were cut.
In an
So far no further details have been given. Launchnodes is investigating “the root cause” of the issue while trimmed validators are offline. The team behind the protocol assured users that “they are not affected, other than a reduction in daily rewards that will be reflected in tomorrow’s rebase.”
According to Lido’s calculations, the penalty represents approximately 2.25% of the protocol’s average daily rewards (or 0.00023% of the total value locked in the protocol). The project also noted Launchnodes “immediately expressed its desire to compensate interested parties as soon as possible.” It means punters will not see “reduced rewards for the day resulting from the disruption and reduction”.
What is cutting in ethereum?
Slashing is a severe form of penalty on the ethereum blockchain that results in the forcible removal of a validator from the network and an associated loss of their staked eth when a validator violates proof-of-stake consensus rules.
However, this practice is quite rare in the ecosystem. In early 2023, a pseudonymous ethereum community consultant, Superphiz he pointed that only 0.04% of ethereum validators have been cut in the last three years.