Penalties

What are the conditions for validators to be penalized when using Smoothly?

The answer to this depends on the validators status with Smoothly. Immediately after a validator registers and deposits their bond, they are given the status “Pending”. These validators begin to accrue rewards immediately, but are unable to claim their rewards from the pool until they propose a block with the Smoothly contract address as the fee recipient. Please see the table below, but in summary, any validator penalized with this status will have their accrued rewards added to the pool (zeroed out). After the penalty is enforced (during the reward cycle update), they being to accrue from zero.

After a successful block proposal (one with the Smoothly contract as the fee recipient), the validators status with Smoothly changes to “Active”. Active validators have the ability to claim their accrued rewards and can claim rewards at all intervals going forward. Because of their ability to claim rewards from the pool, they are now penalized on their bond. All penalties are added to the pool and distributed during the rebalance. Please see the tables below for a simple breakdown.

Validator Status = Pending

Penalty TypePenalty AmountBond Affected?

Any Missed Proposal

Zero out rewards

No

Block Proposal with Incorrect Fee Recipient

Zero out rewards

No

Voluntary Exit (without exiting pool)

Zero out rewards and automatic exit request

No

Relay API Recognized incorrect Fee Recipient

Excluded from rewards cycle

No

*A validators status changes to active when they propose a block with the correct fee recipient. ONLY ACTIVE VALIDATORS CAN CLAIM REWARDS.

Validator Status = Active

Penalty TypePenalty AmountBond Affected?

1st Missed Proposal

None, excluded from one rewards cycle

No

2nd (and subsequent) Missed Proposal

0.15 ETH from bond and excluded from reward cycle until bond is topped up

Yes

Block Proposal with Incorrect Fee Recipient

0.5 ETH from bond and expelled from pool

Yes

Voluntary Exit (without exiting pool)

automatic exit request

No

Relay API Recognized incorrect Fee Recipient

Excluded from reward cycle

No

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