Synthetix Founder Sees Continuous ETH Slashing From Unfortunate Mishap

Rise in Ethereum DeFi Tokens Leads to Increasing Crypto Lending Volumes
Rise in Ethereum DeFi Tokens Leads to Increasing Crypto Lending Volumes

Kain Warwick stands as the founder of the Synthetix DeFi protocol, and is one of the most prominent figures within the DeFi space as a result. Sadly for Warwick, however, it seems that a batch of condensed lousy luck hit him by way of his DappNode shutting down due to a small mishap. Said mishap, however, had cost him some ETH by way of validator penalties.

A Tragic Tale Of Goofy Luck

Warwick let the public know about this blunder through Twitter, telling the crypto space that the hardware for his Ethereum node had somehow been switched off by accident.

Of course, with the node shut off, Warwick suffered through continuous slashing across a number of days, which made him lose ETH in the process. The saddest part is, he doesn’t rightly know who did it, but he couldn’t even be mad at either of his prime suspects if it turned out to be them. His prime suspects in this act of accidental sabotage are, after all, either his Roomba or his toddler.

It should be noted that Warwick hadn’t lost that much, at least for his own scope of wealth, losing less than 1 ETH. The man found it more frustrating and amusing than anything else, and stands as a warning of the dangers posed to stakers should some unforeseen dilemma happen.

Luckily for Warwick, his problem could be solved just by turning around his DappNode, so the thing’s power button is against the wall, thus inaccessible, but others aren’t’ so fortunate.

Some Things Need To Be Worked Through

In fact, there’s a lengthy thread on Reddit about just that: Examples of various users getting “slashed” and subsequent debates about the new proof-of-stake system implemented by the Beacon Chain.

Indeed, one user going by “Rock1006” stated that he had been slashed due to running two instances of the said validator. Another user, “lapalissiano,” saw something similar happen after four instances of the validator were run, being subsequently slashed for “Proposer Violation.”

As it stands now, ETH2.0 stakes are only one-way, with said staked funds needing to be locked up for at least a year, with the funds themselves only becoming available when ETH 1.0 and ETH 2.0 merge.

A Little Detail About Slashing

The Slashing mechanism stands as a negative incentive to try and protect the network as a whole. The design entails punishing validators that do their tasks improperly, and serves two purposes to do this.

The first of which is preventing any validator from either acting maliciously or otherwise underperforming, with the second being increasing the expenses needed to successfully attack the network to the point it’s deemed unfeasible. Slashing can occur in a number of ways, including going down below the 32 ETH threshold by accident, or going offline for long periods of time.

From there, the offending validator has a portion of their existing stake “slashed”, or removed from the stake itself. In time, this could lead to a gradual loss of ETH, before finally marking the stake as “SLASHED” and forcefully ejecting the validator.

Remember, all trading carries risk. Past performance is no guarantee of future results.

A journalist, with experience in web journalism and marketing. Ali holds a master's degree in finance and enjoys writing about cryptocurrencies and fintech. Ali’s work has been published on a number of cryptocurrency publications.