Definition
Slashing is a proof-of-stake protocol penalty that destroys or removes part of a validator’s committed assets for specified prohibited behavior.
In market context
Slashing rules are protocol specific and commonly target conduct such as signing conflicting histories rather than every ordinary period of downtime. A staking provider may allocate the resulting loss differently among itself and customers under its service terms. Users should distinguish slashing from missed rewards, platform fees, market-price losses, and custody failure because each affects returns through a different mechanism.
Risk context
Projected staking yield should be evaluated after validator fees, downtime, slashing allocation, lockups, and asset-price risk.
Source
Use the primary source for fuller regulatory or market context.