To ensure that the nodes (in Proof-of-Stake: validators) participating in a network behave as intended, many protocols enforce penalties if a node provably deviates from pre-defined rules. These penalties apply to both the validator and its delegators.
- Slashing risk (Deduction of staked tokens)
- Excluding a misbehaving node from participating in the protocol
- Temporary lowering of the rewards that delegators receive.
Read our Intro to Staking post to learn more about other risks and tradeoffs to consider before getting involved in staking.