Full Stake vs Partial Stake Slashing

Maximum Security & Deterrence: The entire validator stake is at risk for offenses like double-signing. This creates a powerful economic disincentive, making attacks prohibitively expensive. This matters for high-value, low-trust environments like Cosmos Hub or Ethereum's consensus layer.

Validator Barrier to Entry: Requires significant, liquid capital to be locked. This can lead to centralization among large stakers and reduce the overall number of network participants. This matters for decentralization goals and small-staker participation.

Lower Risk, Higher Participation: Only a portion (e.g., 1-5%) of the stake is slashed for most offenses. This lowers the individual risk for validators, encouraging a broader, more diverse validator set. This matters for networks prioritizing validator growth and resilience like Polkadot's parachains.

Complex Security Calculus: Requires careful tuning of slashing percentages and may need additional mechanisms (like escalating penalties) to maintain security. A poorly calibrated model can be gamed. This matters for protocol designers who must balance safety with liveness and model attack scenarios meticulously.

Complete economic penalty: Validators risk their entire staked amount (e.g., 32 ETH) for severe faults like double-signing. This creates an extremely high cost of attack, directly securing finality. Ideal for high-value, low-latency chains like Ethereum where consensus safety is paramount.

Locked capital risk: The threat of total loss forces validators to maintain excessive operational overhead and conservatism, potentially stifling participation from smaller operators. This can lead to centralization among large, well-capitalized entities (e.g., Lido, Coinbase) who can absorb the risk.

Proportional security: Penalties are scaled to the severity and scope of the fault (e.g., Cosmos's slashing for downtime vs double-signing). This allows for nuanced governance and fault tolerance. Ideal for app-chains and ecosystems like Cosmos and Polkadot, where flexibility and validator onboarding are critical.

Reduced cost of attack: While deterring casual misbehavior, a determined attacker with significant capital may find it economically rational to disrupt the network, especially in low-stake periods. This model often requires stronger assumptions about network synchrony and faster detection mechanisms to remain secure.

Complete economic penalty: Validators risk 100% of their staked assets for severe offenses like double-signing. This creates the strongest possible disincentive for attacks, directly protecting networks like Ethereum and Cosmos. This matters for high-value, security-first protocols where a single successful attack could be catastrophic.

Binary enforcement logic: The rule is absolute—violation leads to total loss. This reduces complexity in the consensus client and slashing detection modules, as seen in Tendermint-based chains. This matters for teams prioritizing straightforward, auditable protocol code over granular penalty systems.

Slash scaled to offense: Penalties are a percentage of the stake, often correlated with the impact of the fault (e.g., 1% for downtime, 5% for equivocation). This is the model used by Solana and proposed by Ethereum's EIP-7251. This matters for encouraging broader, more diverse validator participation by reducing the existential risk for smaller operators.

Targeted enforcement for liveness: Protocols can implement minor slashing for downtime (e.g., 0.01% per epoch) while reserving maximum penalties for safety faults. This maintains network liveness during transient issues. This matters for high-throughput chains like Solana where occasional missed votes are less critical than consensus failures.

High barrier for small validators: The threat of total loss discourages independent operators, favoring large, well-capitalized staking pools (e.g., Lido, Coinbase). This matters for protocols aiming for maximal decentralization, as it can lead to stake concentration and reduced censorship resistance.

Governance overhead: Setting the correct slash percentages for different faults requires careful analysis and ongoing governance, as seen in Cosmos Hub parameter changes. This matters for protocols with less active governance or those seeking a "set-and-forget" security model, as bad parameters can undermine security or be overly punitive.