The most popular liquid staking system, Lido Finance, must first pay a minimum penalty of 20 Ethereum in order to remove its ETH from the compromised validators.
The most number of validators removed in a single day this year occurred on Wednesday when 20 validators connected to Launchnodes, a Lido node operator, were severed from the Ethereum network.
As to Lido’s post, the protocol’s first loss amounts to around 20 ETH, and it is thought that there would be “additional penalties” for inactivity prior to network termination.
Lido Finance Hit with $30k+ Ethereum Slashing Penalty,Lido Finance Hit with $30k+ Ethereum Slashing Penalty
The process of forcibly removing validators from a proof-of-stake network for improperly carrying out their validator duties—such as extended downtime—is known as slashing.
Additionally, there is a 1/32 ETH slashing penalty, with a maximum of 1 ETH being forfeited and burned right away for each slit validator. There may be other sanctions imposed after it.
According to Ethereum.org, the validator cannot withdraw their staked value unless these fines are paid over the course of the following 36 days. A validator departure is now limited to after November 17.
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Launchnodes were informed that “infrastructure and web3 signer configuration issues” were the source of the incident.
The node operator confirmed to Decrypt that “all of Launchnodes’ infrastructure is back up and fully operational, and Lido has been reimbursed in full for all losses incurred to date, ensuring that no stETH holder has suffered any loss.”
The greatest and last slashes
Each validator lost less than 1.10 ETH in penalties during the most recent significant slashing incident, which happened on August 26 when 12 validators were cut simultaneously.
The Lido team also noted that the protocol contains a reserve “cover fund of approximately 6,200 ETH to help mitigate the slashing impact” in reaction to such occurrences.
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The group stated that it cannot know the full magnitude of the damages “ahead of time,” thus it is waiting to find out.
Lido Finance Hit with $30k+ Ethereum Slashing Penalty,Lido Finance Hit with $30k+ Ethereum Slashing Penalty,Lido Finance Hit with $30k+ Ethereum Slashing Penalty