Oh, well, well! Former Twitter CEO Jack Dorsey’s Substack post about how the PoS algorithm works in the event of the Ethereum Merge was not well received by Charles Hoskinson. He said that Bitcoin maximalists would “attack” the Cardano blockchain of having a slashing feature, as well.
The article discussed Ethereum’s Proof of Stake solutions to energy consumption, one of which was “slashing”, or punishing users for adding ambiguity to the network in order to disincentivize other actors from behaving maliciously.
Bitcoin backers see this incentive system as a major disadvantage. It is worth noting that Cardano’s proof-of-stake implementation does not necessitate slashing.
The IOHK team considered a reward-sharing scheme incentive model that promotes the fair formation of stake pools and welcomes as many participants in the PoS network as possible. Thus, they demonstrated that penalizing malicious participants is unnecessary if the desired number of pools exist and they are in Nash equilibrium.