The Lido Finance Ethereum staking protocol experienced 20 slashing events due to infrastructure and signer configuration issues from validators operated by Launchnodes. The incident occurred on October 11, resulting in an impact of 20 Ether (ETH) worth $31,000. The validators involved have been taken offline while the root cause is being investigated. Slashing is a process where a validator breaches a blockchain’s proof-of-stake consensus rules, often resulting in the removal of the validator or slashing a portion of their staked ETH. Lido DAO has an insurance fund of 6,230 stETH worth $9.5 million to mitigate the slashing impact. StETH holders will be compensated once the cover method has been decided. Lido is the largest liquid staking protocol with $13.8 billion in total value locked. Only 226 validators in the Ethereum ecosystem have been slashed since the launch of the Beacon Chain in December 2020.
