Security
Collateral and slashing: how the network is protected
For the network to operate honestly, hosts lock GNK as collateral. It's like a security deposit for an apartment rental: as long as everything is in order, the money is yours. Break the rules — you lose a part of it.
Why collateral is needed
Collateral is GNK locked by a host in a smart contract. It guarantees honesty: if the host acts diligently — they receive full rewards and can withdraw the collateral upon exit. If they try to trick the network — they lose part of the collateral. Without collateral, the host receives only 20% of possible rewards (base weight).
How slashing works
Slashing is a penalty, an automatic write-off of part of the collateral. 20% of the collateral is lost for fraud — attempting to send a fake answer instead of a real inference. 10% is lost for prolonged downtime, when the node doesn't respond to requests. The rules are strict but fair: honest hosts never lose collateral.
Grace Period
For the first 180 epochs (~6 months from mainnet launch) — no collateral is required. New hosts receive 100% PoC weight without locking GNK. This provides time to earn initial tokens and understand the system. After the Grace Period ends — transition to the full collateral model. It is recommended to have a collateral buffer of 2x the minimum.
Collateral protects the network from fraudsters. Honest hosts lose nothing and earn full rewards. Dishonest ones lose 10-20% of their collateral. A grace period without collateral is currently active.
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