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⚡ Penalties

CMv2 uses bond to cover losses and charges that may arise from validator operation. Some are applied automatically, while others are reported by the Curated Module Committee (CMC) and settled through governance. This page explains when each one applies and what happens to your bond.

Penalty types​

General delayed penalty​

Reported manually by the CMC in case of EL stealing (MEV, priority fees), underperformance, or in other cases of protocol rule violations that are not reported automatically.

A General delayed penalty consists of the charge to cover the violation and a fixed additional fine. The penalty amount plus the fixed fine is locked from the sub-NO's bond when the penalty is reported. The fixed fine is 0.1 ETH for the PO type and 0.05 ETH for all the others.

Once the Curated Module Committee (CMC) reports the violation, the amount required to compensate for it, together with the additional fixed fine, is locked from the sub-NO's bond. From there 3 outcomes are possible:

  • The Node Operator compensates the penalty, and the locked bond is released.
  • The Node Operator does NOT compensate, and the CMC initiates an EasyTrack motion to burn the locked bond.
  • If neither side acts, the Node Operator will be able to unlock the bond after 60 days.

Exit Delay Fee​

Applied automatically when a validator is not exited within the allowed time after an exit request. The allowed exit delay is 4 days (i.e., 96 hours) for all types according to the Validator Exits Standard NO Protocol.

The Exit Delay Fee charged at withdrawal for a 2,048 ETH validator is 0.64 ETH for PO and 0.32 ETH for all other types. This charge is reduced linearly if the validator's balance is below 2,048 ETH.

Slashing penalty​

Applied manually by the CMC when one of your validators is slashed on the consensus layer. The CMC proposes the bond deduction via an EasyTrack motion after the slashing is finalized and losses can be calculated.

How penalties are applied​

Most penalties are applied at the time of validator withdrawal. This means your bond is not reduced the moment a penalty is recorded. The deduction happens when the validator exits.

The only exception is the General Delayed Penalty. Once reported, the penalty amount plus a fixed fee is immediately locked in Accounting.sol. If not compensated before the EasyTrack motion executes, the locked bond is burned permanently. If available bond is insufficient, the uncovered amount is recorded as bond debt.

You can verify the Mainnet addresses for Accounting and ExitPenalties in Deployed Contracts.

To unlock locked bond, go to the Bond & Rewards section in the CMv2 widget and open the Unlock Bond tab. For more details, see Bond & Key Management.

Strike system​

info

A strike system is planned for Phase 2 and is not active in Phase 1.

  • The proposed system operates at the sub-Node Operator level, not per key as in CSM.
  • It is intended to account for repeated issues such as poor performance, delayed exits, and policy violations.