At 20:38 UTC this evening, Lido DAO contributors became aware of a limited slashing event associated with a Node Operator in the permissionless Lido Community Staking Module (CSM). Total projected penalties are estimated to be minimal and will be covered by the Node Operator’s bond. Stakers have no reason to worry as the protocol continues to operate normally, and the bond mechanism is a safeguard for unfortunate cases like this.
The initial penalty related to these six slashed validator indices is less than 0.047 ETH (~$100) and, provided no other slashings occur, the aggregate amount of final slashing and offline penalties is estimated to be less than 1 ETH. This amount is entirely covered by the validator bond available. It should be noted that the daily variance in rewards at the protocol level during routine operation often fluctuates between 0.3 to 2 ETH, so the total impact to the protocol is negligible. Once affected validators have been fully exited by the Ethereum network, the event will be automatically picked up by CSM and the difference between the validator’s maximum possible effective balance and the exited balance will be deducted from the operator’s available bond.
Lido contributors and the affected Node Operator are currently investigating the incident and are working on understanding the root cause. A more complete analysis will follow, including the final impact of penalties and missed rewards which can only be calculated upon withdrawal of the impacted validators.