A Multi-Platform Staking Solution Lido Faces Penalty for Misbehaving Validators
Lido, a decentralized finance protocol for staking cryptocurrencies, is facing a penalty of 23 ETH (approximately $35,500) after 20 of its validators were slashed. The validators in question were operated by Launchnodes, a pre-synchronized Geth node for staking that is part of the Lido protocol. Lido confirmed the incident and stated that Launchnodes and DAO contributors are investigating the root cause while the slashed validators remain offline.
The penalty represents about 2.25% of average daily protocol rewards or 0.00023% of the total value locked in the protocol. However, Lido assured users that they will not be affected apart from a reduction in daily rewards, which will be reflected in tomorrow’s rebase. Launchnodes has expressed their desire to compensate stakers as soon as possible, ensuring no lost rewards for stETH holders.
What Is Slashing on Ethereum?
Slashing is a severe penalty in the Ethereum blockchain that involves removing a validator from the network and confiscating their staked ETH when they violate proof-of-stake consensus rules. This practice is relatively rare in the ecosystem, with only 0.04% of Ethereum validators being slashed over the past three years.
Hot Take: Lido Faces Penalty for Misbehaving Validators
Lido, a decentralized finance protocol for staking cryptocurrencies, has encountered its first serious penalty after 20 of its validators were slashed. The penalties amount to 23 ETH (approximately $35,500). The validators in question were operated by Launchnodes, a pre-synchronized Geth node for staking that is part of the Lido protocol.
Lido has reassured users that they will not be affected by the incident, apart from a reduction in daily rewards. Launchnodes has expressed its intention to compensate stakers promptly to ensure no lost rewards for stETH holders. Slashing is a severe penalty on the Ethereum blockchain that involves removing validators and confiscating their staked ETH when they violate proof-of-stake consensus rules.
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