Slashing Mechanism

Slashing Mechanism

Slashing is a penalty mechanism designed to ensure the reliability and security of the Aethir network. It discourages malicious behavior and container downtime by reducing the staking amount of the container and temporarily halting its operation until the stake is replenished. For any container that meets slashing conditions, rewards will first be slashed, followed by stake amount.

The slashing mechanism is implemented for several key reasons:

1. Incentivizing Reliability: It encourages GPU nodes to maintain high uptime and reliable performance. By imposing penalties for downtime, it promotes accountability among node operators.

2. Network Security: Slashing helps protect the network from malicious actors. If a node behaves dishonestly or fails to perform its duties, slashing acts as a deterrent against such behavior.

3. Fairness in Resource Allocation: It ensures that resources are allocated efficiently. Nodes that consistently perform poorly may lose their stake, allowing better-performing nodes to take their place.

4. Encouraging Compliance: By penalizing non-compliance with the network's rules or performance standards, slashing ensures that all participants adhere to the agreed-upon protocols, maintaining the integrity of the system.

5. Economic Stability: Slashing can help stabilize the token economy by reducing the number of poorly performing nodes, which can lead to a healthier overall ecosystem.

Offline Slashing Penalty:

• Aethir network collects "heartbeat" messages from GPU Nodes every minute. If a node fails to send these messages, it is considered offline. Messages are sent via the Aethir agent running on the bare metal server. It is the Cloud Host’s responsibility to ensure Aethir agents don’t get deleted or terminated on the server, as it may result in inaccurate status reports.

• Daily Offline Rate: is the cumulative offline time calculated at the end of each day 23:59:59 UTC.

• Monthly Uptime Rate: is the cumulative uptime calculated at the end of the order (if the order period is less than 30 days) or every 30 days after the order takes effect;

• Non-order period: No slashing will occur if your GPU node is not reserved by tenants. You will however lose out on Proof of Capacity rewards when you are offline.

• Slashing Types:

  • Daily Slashing

    • If your “Daily Offline Rate” is greater than 30 minutes , you will lose out on the Service Fee for the day.

    • If your “Daily Offline Rate” is greater than 60 minutes, you will lose out on the Proof of Capacity and Proof of Delivery rewards for the day.

  • Monthly Slashing

    • “Monthly Uptime Rate (MUR)” is used to determine the amount of Penalty Notice for each slashing occurrence.

    • “Penalty Notice (PN)” is a formal notification issued to a node or participant, indicating that they have violated the SLA agreement. This notice details the associated fine, which requires the recipient to pay back within 30 days.

    • 95% <= MUR < 99%: 10% Service fee as PN

    • 90% <= MUR < 95%: 30% Service fee as PN

    • 80% <= MUR < 90%: 50% Service fee + ⅓ current Staking Fee as PN

    • 70% <= MUR < 80%: 50% Service fee + ⅔ current Staking Fee as PN

    • MUR < 70%: 100% Service fee + 100% current Staking Fee as PN and order is terminated.

    • Daily Slashing and Monthly Slashing can stack.

    • The Cloud Host has 3 calendar days to appeal the penalty.

Spec Mismatching Slashing Penalty:

• If a resource’s performance is lower than the spec it declares when initially onboarded into Aethir, the resource will be penalized 100% of its original staking fee, order terminated and taken offline, with a 3-day appeal period.

Penalty Notice Rules:

• Slashed amount will be transferred to a “compensation” pool, which is used to compensate Aethir Tenants, for interrupted cloud services based on SLAs.

• “Penalty Notice” can be paid with vested service fees or rewards, or direct deposit of ATH.

• Pending penalty will result in inability to unstake, or claim service fees or rewards.

• If the accumulated unpaid penalty amount exceeds the resource’s staking amount, it will be taken offline. When the host settles all penalties, the resource will automatically return to "In Service" status.

• If unpaid penalties are pending for more than 30 days, Aethir reserves the right to transfer the equivalent amount of your pending penalty, from your host account’s ATH balance, into the “compensation” pool. The order of deduction is service fee > reward > staking fee. If there is still remaining compensation that needs to be made to tenants, then the “compensation” pool will cover the rest.