Risk Control

Slash is generally designed as a progressive penalty and is only applied in cases where illegal operations are triggered multiple times, such as missing blocks. So Bifrost will list its supported Slash rules in PoS network, which warn or punish bidders based on their severity. To become a bidder, there will be a deposit of a certain amount of BNC as Slash insurance and the bidder shall bear the risk of capital loss due to bidders taking the initiative to get vote rights. Thus when Slash occurs, it will be deducted from the BNC that was pledged by the bidder first. In cases when the Slash penalty is too large to be secured by all bidders, the Slash penalty will be deducted from the public insurance fund and the Slash risk will be borne by all vToken holders. If overall Slash reaches 10% of the total Token, the Token protocol enters the period of emergency stop, all the stages of Staking the original Token will be redeemed. At the same time, the system will stop functions of vote right bidding and Staking, then vTokenmint price will not change. Users can always redeem vToken into the original Token, the system will be trying to find the reason for Slash and prevent further loss. After the problem is fixed, the protocol can be restarted by referendum.