170,000 a minute! The Staking economy, Slash punishment, is scary

The Wetez team released one on April 10WeChat public articleIn this paper, it is emphasized to remind the majority of holders of PoS consensus not to blindly participate in the Staking market because of the overheating of the market, thus ignoring the investment risks.

mentionedSimilar to the computational power in PoW, the more computational power there is, the more secure the network will be. By putting this concept into the PoS consensus mechanism, Staking plays the role of calculating power to some extent. Its design is originally an important means to participate in the network security of PoS public chain.

When the PoS consensus was proposed, one of the most important points was to try to use Voting Power involved in Stake instead of force weight in PoW to eliminate energy consumption.

Slash penalty mechanism

PoS is designed to be more risky than PoW, leading to a penalty mechanism called Slash, in addition to losing rewards.

And the Slash penalty would cost the holder a lot of money.

In the Tezos community, there is a browser of tzscan that records miners who have been Slash, including a miner who lost about 170,000 RMB in one minute due to triggering the Slash mechanism.

The risk is generally taken by the Staking people. The holder of Staking's money will reap the benefits and should take the risks.

In Cosmos, for example, the holder of Staking can enjoy up to 7~20% annual benefits in Cosmos, but at the same time, the holder is also sharing the risk of being Slash. Once the system does not work during Staking, your Staking token will be deducted a certain amount.

However, due to the high technical threshold of Staking, not everyone can handle it, so there will be users who entrust Staking to "experts" to operate, which is actually the right to operate.

Locking time risk

In the current PoS Staking mechanism, locking Staking tokens is a very common means to prevent a famous Longrange Attack in PoS. Users can apply for Staking redemption at any time, but the time of return depends on the project system. Sometimes, time decides a lot of things, and taking a slow step can cost you a lot more than Staking out the benefits of the year.

In the existing PoS projects, the locking cycle of this token is generally around 15-21 days, and a little longer, it can be as long as 4 months, and even locking the token for half a year is also possible. And some projects, like fund management or bank deposits, extend the lock-in period with high annual benefits.

Slash and locking cycle are two important risks of Staking, and delegating power increases the complexity of risks. The relationship between the holder and the client, the market and the system, needs to consider the interaction and risk, so that the holder can understand how to make enough profit with Staking.

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