Slashing Formula

In general, the cumulative amount slashed increases exponentially in the event of consecutive OR predictions made by a Panelist. To account for genuine differences in opinion and prevent penalizing Panelists for unintentional errors, a forgiveness clause can be incorporated into the mechanism. This clause also prevents slashing due to accidental OR predictions and allows Panelists to adjust their model parameters to better align with the evolving market landscape.

The general formula for calculating the cumulative slash at the end of each slashing event is as follows:

$$f(k) = \left(\frac{k-n}{N-n}\right)^2 \quad \text{where} \quad 0 < n \leq k \leq N$$

where

• f is a function of the cumulative slashes given the number of consecutive slashing events

• k is the number of consecutive slashing events

• N is the number of consecutive slashing events for the Panelist to be fully slashed

• n is the number of consecutive OR submissions that will be forgiven before slashing is enforced

Based on this formula, an example slashing schedule will commence as follows if n = 1 and N = 8, meaning that a Panelist is forgiven once, and the full amount staked will be slashed at the 8th consecutive OR: