Slashing Mechanism

To maintain network integrity, incentivize responsible participation, and deter malicious behaviour, the $SOUND token has incorporated a slashing mechanism by enforcing penalties for non-compliance. Slashing is applied in specific cases where network participants, particularly node operators, stakers, or borrowers, fail to meet platform requirements. The system automatically reduces a portion (or all) of their staked/locked tokens as a penalty for violations. Scenarios where slashing may occur:

1. Node Operator Misconduct:

   1. Downtime Penalties: Node operators who fail to maintain minimum uptime requirements or disrupt network performance may have a portion (or all) of their staked $SOUND tokens slashed.

   2. Malicious Behaviour: Any attempt to manipulate transactions, misreport data, or engage in fraudulent activity results in severe slashing penalties or even full stake forfeiture.

2. Failure to Meet Staking Commitments: Users who commit to platform staking (e.g., earning platform credits or borrowing mechanisms) but withdraw early before fulfilling the minimum staking period may face a slashing penalty, reducing their rewards.

3. Unfulfilled Loan Agreements in Borrowing Mechanisms: If users borrow $SOUND tokens from third parties but fail to meet repayment terms, a slashing fee may be applied to their locked assets or collateral.