Distribution of Slashed Tokens

After a slashing event occurs within the Treehouse Protocol, a structured distribution process is initiated to ensure fairness and incentivize accuracy among Panelists. The following parameters regarding the distribution of slashed tokens can be defined by the Operator:

• Token Burn: A percentage of the slashed tokens can be permanently removed from circulation through a burn mechanism.

• Redistribution to Best Performing Panelist: Similar to the Payout Mechanism, the best predictors can be defined by the Operators as those who provide the predictions within certain standard deviations of the realized rate. The redistribution will be made in the form of escrowed tokens. The exact amount of distributions is inversely proportional to the absolute difference between their submitted predictions and the realized rate. This incentivizes Panelists to perform their best efforts to align with the market consensus which, in turn, promotes a competitive and accurate prediction system. In instances where multiple Panelists make the same predictions, the redistributed tokens are divided equally among them. Tokens will also be redistributed to Delegators who have entrusted their stake to the rewarded Panelists, mirroring the mechanisms described in the Payout Mechanisms.