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Oracle Slashing

Pronunciation
[awr-uh-kl slash-ing]
Analogy
Like losing part of your security deposit if you break lease rules.
Definition
The automatic forfeiture of oracle node collateral when on‑chain checks detect misbehavior—such as incorrect attestations, downtime, or inconsistent reporting—deterring malicious or negligent activity.
Key Points Intro
Oracle slashing enforces accountability by financially penalizing misbehaving nodes.
Key Points

Misreport detection: Compares against consensus or firewall checks.

Downtime penalty: Slashes for missing updates.

Dispute resolution: Allows challenges before slashing.

Stake reduction: Burns or redistributes collateral.

Example
A node submitting an outlier price beyond threshold is slashed 5% of its staked tokens by the slashing contract.
Technical Deep Dive
Slashing contract exposes `slash(node, proof)` which verifies misbehavior proof, reduces `stake[node]`, and transfers penalty to a DAO treasury or challengers.
Security Warning
Incorrect slashing can hurt honest nodes; require multi‑party challenge validation.
Caveat
Slashing parameters must balance deterrence with risk of wrongful penalties.
Related Terms
Oracle Collateralization
Oracle Consensus
Oracle DAO
Oracle SLA Enforcement
Oracle Escrow

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