Bonded Validator

A bonded validator's stake acts as a financial guarantee for honest behavior. Malicious actions, such as double-signing or prolonged downtime, can trigger slashing, where a portion of the stake is burned or redistributed. This mechanism makes attacks economically irrational, as the potential loss far outweighs any gain. The security of the network is directly proportional to the total value bonded.

Validators are randomly selected to propose new blocks based on the size of their stake. All active validators then participate in a multi-round voting process to achieve consensus on the proposed block's validity. This process, often using algorithms like Tendermint or Casper FFG, ensures a single, canonical chain history is agreed upon without the energy expenditure of Proof-of-Work.

Token holders who do not run validator software can delegate their tokens to a bonded validator of their choice. The validator earns block rewards and transaction fees, which are shared with their delegators after deducting a commission. This system allows for broad participation in network security and creates a yield-generating asset class from staked tokens.

To withdraw staked funds, a validator must initiate an unbonding period, which can last from days to weeks (e.g., 21 days on Cosmos, 7-28 days on Ethereum). During this time, the tokens are illiquid and do not earn rewards. This period acts as a cooldown, providing the network time to detect and slash any fraudulent activity that occurred while the validator was active.

Running a bonded validator requires enterprise-grade, reliable infrastructure to avoid slashing for downtime. Key requirements include:

• A dedicated server or cloud instance
• High uptime and network connectivity
• Secure key management (often using HSMs)
• Constant monitoring and software updates Failure to maintain this can lead to missed rewards and slashing penalties.

In many PoS networks, bonded validators often have a privileged role in on-chain governance. Their voting power on protocol upgrades and parameter changes is typically weighted by the size of their bonded stake (including delegations). This aligns the network's decision-makers with its long-term security and success, though it also centralizes influence with large validators.

In the Pyth Network, data publishers (entities providing first-party price feeds) are required to stake PYTH tokens. This stake acts as a bond, ensuring accountability for the data they contribute. The size of a publisher's stake can influence the weight of their data in the network's aggregation mechanism, directly linking financial commitment to influence.

UMA's Optimistic Oracle model uses bonded validators in a dispute resolution system. A proposer posts a bond when submitting a data claim (e.g., a price). This claim is considered truthful unless a disputer, who must also post a bond, challenges it within a liveness period. Bonds are slashed from the losing side, economically securing data correctness.

Band Protocol operates as a Proof-of-Stake (PoS) blockchain where validators are bonded with BAND tokens. Token holders can delegate their stake to validators, sharing in rewards and risks. These bonded validators are responsible for committing data to the BandChain and can be slashed for malicious behavior, securing the oracle's data layer.

Across implementations, bonded validator models share key security patterns:

• Slashing Conditions: Bonds are forfeited for provable malfeasance (e.g., providing incorrect data, censorship).
• Bond Size as Reputation: A larger stake often signals greater commitment and can increase a node's work allocation.
• Unbonding Periods: Mandatory waiting periods for withdrawing stakes prevent rapid exit after an attack.
• Sybil Resistance: The financial cost of bonding prevents an attacker from cheaply creating many malicious identities.

A consensus mechanism where validators are chosen to create new blocks and secure the network based on the amount of cryptocurrency they stake as collateral. This is the foundational protocol that makes bonded validators necessary, replacing the energy-intensive mining of Proof-of-Work (PoW).

A penalty mechanism where a portion of a validator's bonded stake is automatically destroyed (burned) for malicious or negligent behavior. Common slashable offenses include:

• Double signing: Proposing or attesting to two conflicting blocks.
• Downtime: Being offline when required to perform duties.
• Governance violations: Voting against protocol rules.

A token holder who does not run validator software but delegates their tokens to a bonded validator's staking pool. The delegator shares in the validator's rewards but also their slashing risks. This mechanism allows for broader network participation and security without requiring technical expertise.

The two components of a validator's total stake:

• Self-bond (Self-stake): The validator operator's own funds, which signal "skin in the game" and commitment.
• Delegated Stake: Tokens entrusted to the validator by external delegators. The ratio of self-bond to delegated stake is a key metric for assessing a validator's alignment with network health.

The active group of bonded validators currently participating in consensus for a given blockchain epoch or era. The size of this set is often capped for performance reasons. Validators may enter or exit this set based on their total stake and the network's staking queue mechanics.

A mandatory waiting period (e.g., 7-28 days on many networks) after a validator signals intent to exit or a delegator initiates an unstake. During this time, funds are illiquid and still subject to slashing for offenses committed before the period began. This provides a security cooldown.