On April 17, 2025, EigenLayer launched slashing on mainnet, a groundbreaking advancement that unlocks new dimensions of security and accountability for decentralized services. This feature empowers AVSs to define and enforce customized economic penalties, ensuring stronger alignment and trust through enforceable operator commitments.
Impact on Puffer and pufETH
Currently, no AVSs supported by Puffer Finance have slashing enabled by default. Participation in slashable AVSs remains strictly opt-in for Node Operators. Operators interested in supporting slashable AVSs must explicitly re-register their nodes under the updated EigenLayer contracts. Puffer has coordinated with all Node Operators allocated to and instructed them not to opt in to slashable stake unless directed by Puffer.
Key Features Introduced
- Unique Stake Allocation: Operators can allocate specific portions of their staked ETH to individual AVSs, isolating slashing risks and protecting the rest of their stake. The uniqueness of the slashable stake only applies to other unique stake opportunities and does not exclude the unique stake from securing pooled staking opportunities.
- Operator Sets: AVSs can define specific operator groups with distinct responsibilities, performance standards, and risk exposures, enabling them to calibrate compensation to task complexity and risk. AVSs can define multiple operator sets within a single AVS.
- Customizable Reward Structures: Operators may configure their fee percentages for each Operator Set they join. By default, a 10% fee applies unless otherwise specified. This flexibility allows operators to align compensation with task complexity and associated risks. Puffer and the set of partnered operators have aligned on fees upfront, so there should be no surprises here.
Slashing Mechanics and Execution
Slashing is fully defined and executed at the AVS level, not by EigenLayer. This allows each AVS to customize slashing logic, including fraud proofs, challenge periods, or time-locked penalty systems. When invoked, slashing burns the affected portion of an operator’s stake, rendering it permanently inaccessible.
Operators’ exposure is capped at their allocated Unique Stake, and two protocol-defined parameters govern how that risk is applied:
- Allocation Delay: A configurable wait period before the newly allocated stake becomes slashable.
- Deallocation Delay: A 14-day buffer during which stake remains slashable even after an operator exits a set.
These mechanics provide both AVSs and stakers with visibility and protection around how risk is assumed and exited.
Note: This deallocation delay is separate from the 14-day withdrawal period introduced in the EigenLayer contract upgrade.
Operational Changes for Puffer Operators
- Withdrawal Period Extension: Following the EigenLayer contract upgrade, the withdrawal period has increased from 7 to 14 days.
- Re-registration Requirement: Operators participating in slashable AVSs must re-register their nodes under the new framework.
Risk Management Recommendations
- Detailed Evaluation: Before opting in, Gauntlet will review each AVS’s slashing terms and risk framework, including uptime requirements, fraud-proof mechanisms, and dispute resolution processes.
- Active Monitoring: Gauntlet will employ rigorous monitoring practices to track performance metrics and compliance.
- Stake Allocation Management: Gauntlet recommends that Puffer allocate Unique Stake conservatively and transparently to minimize correlated exposure, especially as track records are being established by AVSs.
- Diversification: Gauntlet will recommend that Puffer distribute their participation across multiple AVSs to reduce exposure to any single slashing event.
Conclusion
Slashing marks a significant step forward for EigenLayer and the broader restaking ecosystem, bringing stronger guarantees and enforceable commitments to decentralized infrastructure. While participation remains optional, the implications for operator accountability and service reliability are profound.
Puffer Finance will continue to support its community by sharing relevant guidance, monitoring developments, and encouraging safe and informed participation as slashing adoption grows.