Neutron implements a unique approach to validator accountability that differs significantly from traditional Proof of Stake networks. Following the Mercury upgrade, this model has been formalized and enhanced.

​
Neutron’s No-Slashing Model

Unlike most Cosmos chains, Neutron implements a no-slashing model. This means:
  • Validators and delegators are not penalized with stake reduction for downtime
  • Double-signing does not result in automatic stake slashing
  • Missing blocks does not trigger automatic financial penalties
Instead, Neutron uses alternative mechanisms to ensure network security and validator performance.

​
Jailing and Tombstoning Mechanisms

While Neutron doesn’t slash, it employs other protective measures:

​
Jailing

Validators may be jailed (temporarily suspended from the active set) for:
  • Excessive Downtime: Missing too many blocks in a defined window
  • Upgrade Failures: Not implementing upgrades correctly or promptly
  • Performance Issues: Consistently failing to meet performance thresholds
Jailed validators:
  • Cannot participate in consensus
  • Cannot earn rewards
  • Must undergo an unjailing process to resume validation

​
Tombstoning

For more serious offenses, validators may be tombstoned:
  • Double-Signing: Signing conflicting blocks at the same height
  • Repeated Jailing: Multiple jailing events in a short timeframe
  • Security Breaches: Compromised validator keys or infrastructure
Tombstoned validators:
  • Are permanently removed from the current active set
  • Must establish a new validator identity to participate again
  • Are flagged for potential rotation in the validator set

​
Performance-Based Offboarding

Post-Mercury upgrade, Neutron implements formal offboarding criteria:

​
Performance-Based Criteria

A validator is considered for offboarding if:
  • They receive no compensation from x/revenue for two consecutive months
  • They receive no compensation from x/revenue for three months in a 6-month period
  • They are tombstoned

​
Downtime-Based Criteria

A validator is considered for offboarding if:
  • They fail to resume signing within 60 minutes of the first finalized block after an upgrade
  • They fail to begin precommitting within 2 hours of the distribution of upgrade instructions

​
Warning and Notification System

The offboarding process includes a structured warning system:
  1. First Notification: Validators are notified about performance issues
  2. Assistance Phase: Core teams assist in troubleshooting any issues
  3. Final Warning: Clear communication about impending offboarding if issues persist
  4. Offboarding Decision: Final determination through the DAO governance process

​
Validator Rotation Process

When validators are offboarded, new validators may join through a structured process:
  1. Eligibility Assessment: Validators must run both mainnet and testnet nodes
  2. Initial Delegation: Selected validators receive a small initial delegation
  3. Probation Period: Three-month period to demonstrate adequate performance
  4. Full Delegation: Successful validators receive a full delegation from the DAO

​
Why No Slashing?

Neutron’s approach offers several advantages:
  1. Lower Risk for Delegators: Delegators don’t face the risk of losing funds due to validator mistakes
  2. Broader Participation: Lower risk encourages greater staking participation
  3. Focus on Quality: Selection based on quality rather than penalty avoidance
  4. Delegator Protection: Reduces the risk that delegators lose funds due to validator errors
  5. Upgrade Safety: Encourages validators to be more responsive during network upgrades

​
Comparison with Traditional Slashing

AspectTraditional SlashingNeutron’s Model
Downtime PenaltyLoss of stake (e.g., 0.01-1%)Jailing without stake loss
Double-Sign PenaltySevere stake loss (e.g., 5-100%)Tombstoning without stake loss
RecoveryDifficult to recover after slashingFocus on improvement or validator rotation
Delegator RiskDelegators lose funds for validator mistakesDelegators protected from direct losses
Security ModelCryptoeconomic penaltiesCuration, incentives, and rotation

​
Validator Responsibilities

Despite the absence of slashing, validators still have important responsibilities:
  • Maintain High Performance: Meet or exceed the required block signing (99.5%) and price update (98%) thresholds
  • Prevent Double-Signing: Implement proper key management and signer redundancy
  • Upgrade Readiness: Prepare for and execute network upgrades promptly
  • Security Best Practices: Follow security recommendations to protect the network

​
Delegator Considerations

For delegators, Neutron’s approach means:
  • Reduced Risk: No direct financial loss from validator mistakes
  • Consistent Returns: Target 3% APR regardless of validator selection
  • Importance of Research: Still valuable to choose validators with strong technical capabilities

​
Governance and Evolution

The validator accountability system falls under DAO governance and may evolve:
  • Parameter Changes: Modifying jailing thresholds or performance requirements
  • New Mechanisms: Introducing additional quality assurance systems
  • Validator Set Size: Potential changes to the number of active validators
  • Performance Metrics: Refinement of what metrics are used to evaluate validators