LZ Research challenges slashing's role in proof-of-stake security
Summary
LZ Research has released a new paper titled "Too Late to Slash," which challenges the commonly held belief that slashing strengthens the security of proof-of-stake blockchains. The research demonstrates that validators can ascertain whether enough participants are willing to coordinate an attack before any evidence of misbehavior occurs. If the coalition lacks sufficient power, the attack is abandoned without repercussions. However, once validators reach a certain level of consensus power, they can execute an attack and prevent punishment by censoring transactions, making slashing unenforceable. This insight suggests that the effectiveness of slashing depends on the coalition's ability to control the enforcement process, questioning the assumption that increasing the amount of slashable capital proportionately enhances economic security.