Slashing

In simple terms, Slashing can be explained as the penalty incurred on a validator and nominator for indulging in unethical behavior. The categorization of unethical behavior is given in subsequent sections. Slashing will result in validators and their nominators losing a percentage of their bonded/staked VNE

Any VNE slashed is added to the Treasury. The reason behind this (rather than burning or distributing them as rewards) is that slashes may then be reverted by the Council by simply paying out from the Treasury. This would be useful in situations such as faulty slashes. In the case of legitimate slashing, it moves tokens away from malicious validators to those building the ecosystem through the normal Treasury process.

Validators with a larger stake will be slashed more severely than less popular ones. This is done so that nominator can shift their nominations to less popular validators.