Lido Faces 20 ETH Slashing Penalty

Lido Finance, the leading liquid staking protocol, has disclosed that 20 slashings have occurred in connection with validators operated by Launchnodes, one of the protocol’s node operators.

Following the incident, both Launchnodes and DAO contributors have initiated an investigation to determine the cause of the slashings. As a precautionary measure, the affected validators have been taken offline.

Slashing refers to a penalty mechanism where validators or miners can lose a portion or all of their staked tokens if they engage in malicious actions or fail to perform their network duties properly. By imposing financial and reputational penalties, slashing helps maintain the network's security, integrity, and performance, deterring harmful behavior and promoting honest participation.

The Lido team has not provided a timeline but updates are expected to be shared with the community as they become available.

Lido is DeFi’s largest protocol with nearly $14B in total value locked (TVL). Its native LDO token is up 6% in the past month.