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
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
- 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
- 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:- First Notification: Validators are notified about performance issues
- Assistance Phase: Core teams assist in troubleshooting any issues
- Final Warning: Clear communication about impending offboarding if issues persist
- Offboarding Decision: Final determination through the DAO governance process
Validator Rotation Process
When validators are offboarded, new validators may join through a structured process:- Eligibility Assessment: Validators must run both mainnet and testnet nodes
- Initial Delegation: Selected validators receive a small initial delegation
- Probation Period: Three-month period to demonstrate adequate performance
- Full Delegation: Successful validators receive a full delegation from the DAO
Why No Slashing?
Neutron’s approach offers several advantages:- Lower Risk for Delegators: Delegators don’t face the risk of losing funds due to validator mistakes
- Broader Participation: Lower risk encourages greater staking participation
- Focus on Quality: Selection based on quality rather than penalty avoidance
- Delegator Protection: Reduces the risk that delegators lose funds due to validator errors
- Upgrade Safety: Encourages validators to be more responsive during network upgrades
Comparison with Traditional Slashing
| Aspect | Traditional Slashing | Neutron’s Model |
|---|---|---|
| Downtime Penalty | Loss of stake (e.g., 0.01-1%) | Jailing without stake loss |
| Double-Sign Penalty | Severe stake loss (e.g., 5-100%) | Tombstoning without stake loss |
| Recovery | Difficult to recover after slashing | Focus on improvement or validator rotation |
| Delegator Risk | Delegators lose funds for validator mistakes | Delegators protected from direct losses |
| Security Model | Cryptoeconomic penalties | Curation, 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