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 Type	Penalty Amount	Bond 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 Type	Penalty Amount	Bond 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