Slashing is used in n case of Validator misbehaviour (defined individually within each protocol), the total stake of the Validator (Own Stake/Bond and sometimes even Delegated Stake) gets slashed, meaning that a certain percentage of tokens are burned or distributed to other network validators. This is designed to incentivize security, availability and governance participation as well as prevent double spend or spam attacks.
I’ve listed a few examples below.
A liveness fault where the validator node does not participate in the network consensus for a long time and misses several blocks. If the node is not signing transactions for a certain amount of time, it will be considered inactive and may start losing out on block rewards. After a certain threshold is crossed, it might also be slashed, resulting in a permanent loss of stake and the potential suspension from the validator set. This can happen when a node’s cloud infrastructure goes down, or if the software becomes out of sync, for example.
A security fault which disturbs the network consensus by validating/verifying twice or more the same blocks. Double signing or the action of signing two blocks at the same block height, is more severely punished by the different protocol parameters. This can either happen when an opposite validator is trying to attack the network or because of an unstable or unreliable infrastructure, leading to one key signing the same block twice.
A governance fault where the validator voted multiple times on the same consensus process, and these votes contradict each other, or he did not vote at all.
These examples are not all inclusive. Nor do they represent or assume to represent Incognito’s network parameters.