Slashing in staking is a penalty mechanism used in Proof of Stake (PoS) blockchain networks to discourage dishonest or careless behaviour by validators. When participants stake their cryptocurrency to help validate transactions and secure the network, they are expected to follow strict rules. If they violate these rules, a portion of their staked funds can be deducted as punishment. This penalty is known as slashing.

Slashing usually occurs when a validator engages in malicious actions such as double-signing blocks, attempting to manipulate the network, or validating conflicting transactions. It can also happen due to negligence, such as prolonged downtime or failure to maintain proper node performance. The severity of the penalty depends on the network’s rules and the seriousness of the violation.

For example, in networks like Ethereum, validators who act maliciously or remain offline for extended periods risk losing part of their staked ETH. In some cases, repeated offences may result in complete removal from the validator set.

Slashing is essential because it creates financial consequences for bad behaviour, ensuring validators act honestly and maintain reliable performance. This system strengthens network security, builds trust among participants, and helps maintain decentralisation. However, it also means that staking carries risks, so participants must carefully choose reliable validators or maintain a proper technical setup when self-staking.