According to Cointelegraph, Ethereum staking protocol Lido Finance has reported 20 slashing events due to infrastructure and signer configuration issues from validators operated by Launchnodes. The incident took place on October 11 at around 3:30 pm UTC. Lido stated that Launchnodes' validator nodes are now offline, and slashings have ceased while the root cause is being investigated.
The slashing occurred on the Ethereum blockchain, and Lido estimated the impact to be around 20 Ether (ETH), worth $31,000, as well as additional penalties while the validators are offline for troubleshooting, along with inactivity penalties that the validators will accumulate. Slashing is a process where a validator breaches a blockchainâs proof-of-stake consensus rules, which often results in the removal of that validator or slashing a portion of the staked-Ether that they provided as collateral.
Launchnode later confirmed that the slashing events occurred due to an infrastructure and signer configuration issue and stated that they are taking steps to prevent any further occurrences and restore full service. Lido assured that stakers on the protocol are not affected other than a reduction in daily rewards that will be reflected in the next rebase on October 12. The staking provider also confirmed that the Lido DAO has an insurance fund of 6,230 staked-ETH, worth $9.5 million, which will be used to mitigate the slashing impact, but it does not trigger automatically. Lido added that stETH holders will be compensated once the âcover methodâ has been decided, while Launchnodes has pledged to reimburse all losses incurred to Lido.
