Slashing

Slashing is a penalty in proof-of-stake blockchains in which part of a validator's staked coins is destroyed and the validator is removed from the network for provably malicious behaviour. It is what gives proof of stake its security: attacking the network puts the attacker's own money at risk.

On Ethereum, a validator is slashed for two kinds of offence: proposing two different blocks for the same slot, or signing contradictory attestations. Most real-world slashings have been accidents, for example when operators ran the same validator keys on two machines as a backup. Penalties start small but grow if many validators are slashed at around the same time, which punishes coordinated attacks.

Slashing is different from the minor penalties for being offline, which simply reduce rewards. If you stake through an exchange, pool or liquid staking protocol, you are indirectly exposed to the operator's slashing risk, so check how the provider handles it and whether it covers losses.