Coordinated Attacks May Outsmart Slashing Mechanism

A new research paper from LZ Research argues that slashing, a key security mechanism in proof-of-stake blockchains, may not be effective against coordinated attacks. The paper, titled 'Too Late to Slash: Coordinating a Risk-Free Equivocation Attack,' proposes a coordination protocol for validators that makes it possible to solicit equivocation without risking losses.

The researchers, Hao Chung and Chen-Da Liu-Zhang, frame their result in game-theoretic terms and show that the proposed strategy results in an ex post Nash equilibrium. This means that even if the attack fails to reach a critical threshold, nobody gets slashed.

The paper suggests that conventional thinking about slashing may be flawed, as it assumes that an attack only makes sense if the payoff exceeds the value of the stake at risk. However, the researchers argue that even minimal successful attacks can come out ahead, because the risk side of the equation has been engineered away.