> For the complete documentation index, see [llms.txt](https://docs.jamgalaxy.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.jamgalaxy.com/whitepaper/usdsound/slashing-mechanism.md).

# 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.