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2. Intermediate Course

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  1. 1. Ethereum 2.0 - What is it? 
  2. 2. What is cryptocurrency burning?
  3. 3. How to create your own cryptocurrency? 
  4. 4. Blockchain Oracle - what are oracles? 
  5. 5. How to make money with NFT?
  6. 6. What is an ERC20 token and how is it created?
  7. 7. The Metaverse – a new virtual world
  8. 8. Metaverse – TOP 15 virtual reality projects
  9. 9. Technical analysis – is it worth using?
  10. 10. What are DeFi liquidity pools?
  11. 11. Second layer (layer 2) - what is it? 
  12. 12. What are wrapped tokens 
  13. 13. What is the Lightning Network, and how does it work?
  14. 14. What are security tokens?
  15. 15. What is play-to-earn (P2E) and how does it work?
  16. 16. What are Social Tokens? 
  17. 17. Examples of the use of WEB3 on the blockchain
  18. 18. What is Web5? 
  19. 19. Ethereum London Hard Fork - what is it ? 
  20. 20. Segregated Witness - what is Segwit Bitcoin all about?
  21. 21. Polkadot - Decentralized blockchain and DOT cryptocurrency
  22. 22. Polkadot Parachain - Next-generation blockchain
  23. 23. Set up of Stop Loss and Take Profit orders
  24. 24. Trading order types: stop loss, trailing stop loss, LIMIT
  25. 25. What are Decentralized Cryptocurrency DEX Exchanges?
  26. 26. What is Curve Finance?
  27. 27. What is GameFi and how does it work?
  28. 28. Non-fungible tokens and NFT exchanges
  29. 29. Cryptocurrency steps - What is move to earn M2E?
  30. 30. What is Proof of Reserves (PoR)? How does it work?
  31. 31. Interoperability in the world of cryptocurrencies and blockchain
  32. 32. Blockchain and its layers - What is layer three in Blockchain (L3)?
  33. 33. What is Layer 0 in Blockchain technology?
  34. 34. What is layer 1 in Blockchain?
  35. 35. What is MakerDAO and DAI Stablecoin?
  36. 38. What is the SubDAO protocol, and how does it work?
  37. 39. The main differences between static NFT and dynamic NFT
  38. 40. Liquidity Provider Tokens (LPs). What are they, and why are they so important?
  39. 41. What is KnowOrigin NFT, and how does it work?
  40. 42. What is decentralized social media?
  41. 43. What is the Ethereum Name Service (ENS) and how does it work?
  42. 44. Arbitrum: Ethereum scaling solution - everything you need to know
  43. 45. Ethereum ERC-4337 - what is it and how does this standard work?
  44. 46. Sustainable Blockchain - Proof of Useful Work & Flux
  45. 47. Ethereum Proof-of-Stake (PoS) - what should you know?
  46. 48. Atomic Swap: What is an atomic swap, and how does it work with cryptocurrencies?
  47. 49. What Is Cryptocurrency Vesting? What Are Its Advantages?
  48. 50. What Is the Metaplex Candy Machine Protocol? How Does It Work?
  49. 51. What Is the BNB Greenfield Ecosystem?
  50. 52. Real Yield in DeFi - what is this trend? What does it consist of?
  51. 53. Polygon 2.0 - the value layer for the Internet
  52. 54. What Is Slashing in Cryptocurrencies?
  53. 55. How to Create Your Own Decentralized Autonomous Organization (DAO)?
  54. 56. The ERC-721X VS ERC-721 Standard – Key Differences!
  55. 57. Royalties – What Are They? How Does This Type of Licensing Fee Work?
  56. 58. Polygon 2.0 - the value layer for the Internet
  57. 59. ERC-6551 - the new NFT standard. What does it bring to the non-exchangeable token sector?
  58. 60. What is TradFi? The importance for cryptocurrencies!
  59. 61. What is the Real World Asset (RWA) trend in cryptocurrencies? Explanation and examples!
  60. 62. Pyth Network: a powerful oracle harnessing the power of Solana!
  61. 63. NFT Gas Fee - what is it? How can you reduce your gas fee?
  62. 64. MINA Protocol: the lightest blockchain in the world!
  63. 65. Market Cap versus Fully Diluted Market Cap - the most important differences you should know!
Lesson 52 of 63
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54. What Is Slashing in Cryptocurrencies?

The proof-of-stake consensus is used to validate transactions and generate new blocks. The entire process requires that validators receive rewards and appropriate compensation for their work.

However, it can happen that validators may intentionally or completely inadvertently engage in activities that harm the proper functioning of the entire blockchain. And this is where crypto slashing appears.

What is this action? What are its causes? Let’s dig deeper into this topic!

Crypto Slashing – Definition

The term is used to refer to validators who violate the principle of proper staking of cryptocurrencies. The main purpose of slashing is to promote appropriate behavior, adherence to the rules in the protocol and responsibility for one’s actions. This punishment encourages participants in a given network to act honestly and eliminate inappropriate behavior.

Simply put, slashing is part of the proof-of-stake consensus, which bans validators with bad intentions.

How Does Slashing Work?

As mentioned earlier, slashing serves as a punishment for inappropriate behavior by validators. It entails reducing a portion of their rewards due to violations of specific network rules.

Remember that validators are key participants in a given protocol or ecosystem. They earn money by verifying transactions and creating new blocks on the chain. For a validator to gain this responsible function, they must first pledge a certain amount of a given cryptocurrency to the network. This is a kind of security and motivates validators to act honestly. Thus, if a validator intentionally engages in something that harms the network, he may lose some of his funds through slashing.

Of course, the severity of the penalty varies from protocol to protocol. But the principle is common – slashing involves some specific percentage that is deducted from the validator’s rate, for each negligence. You probably want to ask at this point – can there be a situation where a validator has been so negligent in his duties that his entire account has been subject to slashing? Yes. This results in the removal of the validator from the community.

Reasons for Slashing

There are three main causes of crypto slashing. The first is the so-called downtime. Each network expects validators to be on standby at all times and to participate in the ecosystem. So if a given validator’s node is offline for an extended period of time, it causes delays in block production. The effect? The overall security of the entire network is reduced. For such behavior, the validator is subject to slashing.

The second reason is double signing. This offense is definitely more serious than downtime. It also involves a much greater penalty. What is involved? Double signing occurs when a validator signs two blocks at the same time – it doesn’t matter whether this procedure is accidental or intentional. This behavior triggers a backup node, which, as you probably know, results in nothing good for the primary chain.

The third is to manipulate the network and, more specifically, the consensus process. Beyond simply participating in the network, validators must completely avoid ill-intentioned behavior that potentially compromises the protocol. Understanding these principles is essential for anyone who wants to act as a network validator.

How to Minimize the Risk of Slashing?

We know – losing capital really hurts. Especially since when you invest in digital assets, you’re setting yourself up for profit, not loss. The good news, however, is that there are many ways to minimize the risk of slashing while still making money through staking.

For example, you can choose projects that do not use slashing. This group includes, for example: VeChain, Neo, Tron, Algorand or Band.

All right, but what about when you are nevertheless interested in a project that uses slashing? You can minimize the risk. Before you start staking, take a look at the rules of the protocol. Some of them are really tolerant, and in order to lose some of your funds, you have to really make an effort.

Trustworthy validators are invaluable to a particular network. The revenue of a given protocol depends on them. No wonder, that the developers of a network choose them so carefully and pay special attention to their behavior. In the case of downtime, part of the reward will be lost not only for the validator, but for the entire network!


If you have aspirations to be a validator, you need to understand what slashing is and the consequences that come with it. Understanding this is not difficult, and it will help you avoid behaviors that are subject to penalties in the ecosystem.