The co-founder of a crypto wallet says he has been “devastated” by accidentally clicking on a fake airdrop scam. Nest Wallet co-founder Bill Lou says he recently lost over $123,000 in staked Ethereum (stETH) while trying to participate in an airdrop. On the social media platform X, Lou shares his story, noting that fell victim to […]
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The initial impact amounted to 20 Ether, worth $31,000, while the validator involved has now been taken offline.
Ethereum staking protocol Lido Finance has disclosed its protocol saw 20 slashing events due to a series of infrastructure and signer configuration issues from validators operated by Launchnodes.
The incident occurred on Oct. 11 at about 3:30 pm UTC, according to Launchnodes. In an Oct. 11 post on X, Lido said Launchnodes' validators nodes are now offline, and slashings have ceased while the root cause was being investigated.
The slashing took place on the Ethereum blockchain and Lido projected the impact to be around 20 Ether (ETH), worth $31,000, as well as additional penalties while the validators are offline for troubleshooting, along with inactivity penalties that the validators will accumulate.
20 slashings have occurred relating to validators operated by the @launchnodes node operators as a part of the Lido protocol.
— Lido (@LidoFinance) October 11, 2023
Launchnodes and DAO contributors are investigating.
The validators are offline and slashings have ceased while the root cause is being investigated.
Slashing is a process where a validator breaches a blockchain’s proof-of-stake consensus rules, which often results in the removal of that validator or slashing a portion of the staked-Ether that they provided as collateral.
In a post hours later, Launchnode said the slashing events occurred due to an infrastructure and signer configuration issue.
“We are investigating, and taking steps to prevent any further occurrences and restore full service,” the platform added.
Addressing the 5:30pm CET incident with Launchnodes' validator nodes for Lido protocol getting slashed: The issue is identified, and linked to an infrastructure and web3 signer configuration issue. We are investigating, and taking steps to prevent any further occurrences and…
— Launchnodes (@launchnodes) October 11, 2023
Lido said stakers on the protocol are not affected other than a reduction in daily rewards that will be reflected in the next rebase on Oct. 12.
The staking provider also confirmed that the Lido DAO has an insurance fund of 6,230 staked-ETH, worth $9.5 million, and will be used to mitigate the slashing impact — but by design it does not trigger automatically.
Lido added that stETH holders will be compensated once the “cover method” has been decided, while Launchnodes has pledged to reimburse all losses incurred to Lido.
Related: Ethereum staking services agree to 22% limit of all validators
The liquid staking protocol said the process isn’t automatic because it is impossible to know what the total losses will be ahead of time.
Lido is by far the largest liquid staking protocol, with $13.8 billion in total value locked on its protocol, according to DefiLlama. The next largest is Rocket Pool at $1.7 billion.
Only 226 validators (0.04% of all validators) in the Ethereum ecosystem have been slashed since the launch of the Beacon Chain on Dec. 1, 2020 up until late February 2023.
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Following the Shapella hard fork on April 12, 2023, approximately 332,368 ether, valued at around $699 million, has been withdrawn. Despite these withdrawals, liquid staking protocols like Lido, Rocketpool, and others have experienced an increase in ether deposits over the last 30 days. Since March 14, a total of 281,498 ether worth $592 million have […]
On Wednesday, April 12, 2023, at 6:30 p.m. Eastern Time, Ethereum’s Shapella upgrade was successfully implemented, enabling validators to withdraw staked ether. Data reveals that more than 860,000 ether is poised for unlocking, and 77,000 ether is expected to be withdrawn on Thursday. Ether’s price has experienced a surge, rising 6% against the U.S. dollar […]
Shapella will take effect at epoch 194,048, which is scheduled for 10:27:35pm UTC on April 12.
Ethereum validators will soon be able to withdraw their Ether (ETH) from the Beacon Chain, with the Shapella hard fork set to be activated on the Ethereum mainnet on April 12.
Shapella will take effect at epoch 194,048, which is scheduled for 10:27 pm UTC on April 12, Ethereum core developers confirmed.
The withdrawals will be enabled by Ethereum Improvement Proposal EIP-4895 by “pushing” staked Ether from the Beacon Chain to the Ethereum Virtual Machine (EVM), otherwise known as the execution layer.
It's happening
— timbeiko.eth ☀️ (@TimBeiko) March 28, 2023
Shapella is scheduled on mainnet for epoch 194048, scheduled for 22:27:35 UTC on Apr. 12, 2023
Client releases compatible with the upgrade are listed in the announcement below https://t.co/I0hSv9lnjz
The epoch, slot, and time were confirmed following a week-long deliberation between members of the Ethereum Foundation, which was led by Ethereum core developer Tim Beiko.
While the hard fork will allow for partial and full withdrawals, several mechanisms are set in place to ensure a flood of Ether supply doesn’t disrupt the market.
There are now 17.81 million Ether staked on the Beacon Chain. At a current price of $1,776, which means $31.6 billion can be incrementally unlocked over time.
While the Ethereum Foundation described the last testnet run on Goerli as “smooth,” there was a notable delay in activation time due to many validators not updating their client software.
However, Beiko is confident it won’t be an issue this time, as Ethereum validators will be economically incentivized to make the update for the Mainnet.
Because of EIP-4895, Shapella is considered the most significant hard fork on Ethereum since Paris (The Merge) changed the network consensus mechanism from proof-of-work to proof-of-stake on Sept 15.
Prior to that, London introduced EIP-1559 in August, 2021, which introduced a base fee that users must pay instead of the old price auction method. While the validators still receive a block reward and tip, the base fee is burned, which is intended to make Ether deflationary over time.
Related: Ethereum’s Shapella transition is “on the horizon”
Berlin optimized gas costs for some EVM actions in April 2021, while Beacon Chain Genesis marked the first block that was produced on the proof-of-stake chain on Dec. 1, 2020.
Finally in December 2019, Istanbul served to improve denial-of-service attack resilience and make layer-2 scaling solutions based on SNARKs and STARKs more performant.
If you want to watch as the upgrade happens, you can join @ethStaker, @EthCatHerders, myself and others during the Shapella watch party here https://t.co/ZHWQfMemZc
— timbeiko.eth ☀️ (@TimBeiko) March 28, 2023
The Ethereum Foundation also announced last week that it doubled rewards for any bugs found in the Shapella code. Successful bounties may receive a reward anywhere between $2,000 and $250,000, depending on how “critical” the bug is.
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On Saturday, the liquid staking protocol Lido tweeted about the largest daily stake inflow to date as 150,000 ethereum was staked. Reports indicate that the ethereum, worth more than $240 million, belongs to Justin Sun, founder of Tron. Liquid Staking Protocol Lido Records 150,000 Ether Inflow Lido, the liquid staking platform with the highest amount […]
Only 226 validators have been slashed since Ethereum staking began, with 75 of those coming from a single event in February 2021.
The Ethereum ecosystem has seen only 226 validators slashed since the launch of the Beacon Chain on Dec. 1, 2020 — amounting to just 0.04% of 524,060 validators, according to an Ethereum core developer.
Slashing is a process where a validator breaches the proof-of-stake consensus rules, which often results in the removal of that validator from the network and slashing a portion of the staked Ether (ETH) that the validator provided as collateral.
Such slim odds of being slashed were highlighted by Ethereum core developer “Superphiz” in a Feb. 23 Twitter post, which suggests that people shouldn’t be concerned about staking ETH for that particular reason.
226 out of 523,000 validators on the beacon chain have been slashed. This is nothing to lose sleep over. Many slashings have occurred during failed system migration. Here are four emerging best practice tips to avoid this:https://t.co/wleR4YQmDD
— superphiz.eth (@superphiz) February 22, 2023
The developer also explained “four emerging best practices” to reduce those odds even further.
One of these practices was to wipe any existing chain data on old staking machines and to reinstall and reformat the validator where necessary, said Superphiz, noting that many slashings occur due to “failed systems migrations.”
Superphiz then suggested using “doppelganger detection,” which checks whether the validator’s keys are active before starting the validation process.
While this can impact validator uptime, he explained that “perfect uptime” isn’t worth getting slashed in the grand scheme of things:
“It's wise to throw away $0.06 to save $1700. (A slashing costs about 1 Ether).”
The developer said it is also worth watching buffers and logs on the Beacon Chain to become aware of any potential problems that may arise.
If something feels wrong, Superphiz suggested “unplugging everything” and to “come back” when the problem has been identified and a proposed solution is set in place.
The developer also noted that over 150 of the 226 slashings have been caused by services rather than “home stakers.”
Slashing can occur due to an “attestation” or a “proposal” violation, according to the Ethereum Foundation.
An attestation violation is one where a malicious validator attempts to change the history of a block or “double votes” by attesting two candidates for the same block.
A proposal violation occurs when a validator proposes and signs two different blocks for the same slot.
The majority of slashing events have come from attestation violations, according to data from beaconcha.in.
One of the largest slashing events occurred on Feb. 4, 2021, when staking infrastructure provider “Staked” had 75 of its validators slashed for producing competing blocks. Staked said the attestation violation came about due to a “technical issue.”
Related: What are the risks of the Ethereum Merge?
Since the Beacon Chain merged with the Ethereum proof-of-work chain on Sept. 15, only 35 of the total 226 slashings have taken place, according to beaconcha.in, which suggests that the Merge has not had a profound impact on slashing rates.
With about 16.7 million ETH staked (according to beaconcha.in) out of 120.4 million ETH currently in circulation (according to CoinGecko), the percentage of ETH staked is about 13.9%.
ETH can be staked via a centralized exchange, by delegation to a third-party validator network, or by running on an independent node, which requires 32 ETH.
