Exits, Rewards, and Slashing

This page covers the end of the work cycle of a ciphernode: rewards, slashing, and the exit queue. It is for operators and bond owners. At the end, you can claim rewards, read and appeal a slash proposal, and leave the network with the collateral returned to the bond owner.

Rewards

A committee earns its reward when its E3 completes. When the committee publishes the plaintext output, the Interfold contract settles the fee of the E3:

1. A protocol share (protocolShareBps, fixed at the request) goes to the protocol treasury.
2. The rest is divided equally between the active committee members. The remainder of the division goes to one member.
3. The contract emits RewardsDistributed(e3Id, nodes, amounts) and one RewardCredited(e3Id, account, token, amount) for each member.

The reward is paid in the fee token of the E3. The recipient is the bond owner of the operator at committee finalization, or the operator when it had no bond owner. A later change of bond owner does not move a reward that is already credited.

Rewards are pull payments. The recipient must claim them:

The CLI has no reward command. Use E3 rewards in the hosted operator guide (opens in a new tab), a wallet, or cast. The guide shows what the recipient can claim and why any other payment cannot be claimed yet. It claims completed-E3 rewards and failed-E3 compensation. For example:

cast call <Interfold> "pendingReward(uint256,address)(uint256)" <e3Id> 0xBOND_OWNER \
  --rpc-url <RPC_URL>
cast send <Interfold> "claimReward(uint256)" <e3Id> --rpc-url <RPC_URL> --account <bond-owner>

When a ciphernode fault makes an E3 fail, honest committee members can receive compensation from the slashed ticket collateral. An open slash proposal that can expel an operator holds the reward share of that operator for the E3. An executed expulsion forfeits the share.

Slashing

The SlashingManager contract proposes, appeals, and executes slashes. Each slash reason has a policy that governance sets. A slash can burn tickets, take FOLD from the ciphernode bond, ban the operator, and expel the operator from the committee of the E3.

How a slash starts

Ciphernodes start Lane A automatically. When a node finds that a committee member sent a proof that does not verify, it broadcasts an accusation, and the committee votes. When enough members agree, the voters submit the slash. The voter with the lowest address submits at once. The next two voters wait 30 s and 60 s as fallbacks.

Nodes ignore local failures against their own address or finalized party ID. For received accusations, nodes compare the signed accuser and accused addresses to reject self-accusations. The accusation digest does not include accused_party_id, so that field does not decide this check. Only C3a and C3b accusations can carry a forwarded proof for verification. Other proof types require local evidence and no forwarded payload before the node votes.

For Lane A, the slash reason is keccak256(abi.encodePacked(uint256(proofType))). The proof types are the DKG and decryption proofs C0 to C7. If governance disabled the policy for a proof type, the nodes exclude the member from that E3 only, and no penalty applies. When the agreeing voters saw different data from the accused operator, the result is equivocation. The nodes do not submit a slash for equivocation, because the current evidence format cannot prove it.

The slash policy

Read a policy with getSlashPolicy(reason), a proposal with getSlashProposal(proposalId), and a ban with isBanned(operator). The proposal copies the policy values when it opens, so a later policy change does not change it.

How a slash executes

A ticket penalty burns tFOLD from the active balance first. The rest comes from the exit queue, including queue entries that are still locked. A bond penalty takes FOLD from the active bond first and then from the queued bond. A penalty is limited to the balance that exists.

An expulsion removes the operator from the committee of that E3. If the number of active members falls below H (the DKG roster size), the E3 fails with InsufficientCommitteeMembers. The slashed ticket collateral goes to escrow for the E3, and the settlement of the E3 decides who receives it.

While a proposal against the operator is open, these actions revert with OperatorUnderSlash: ticket removal, unbonding, deregistration, and exit claims.

Respond to a slash proposal

cast send <SlashingManager> "fileAppeal(uint256,string)" <proposalId> "<evidence URI>" \
  --rpc-url <RPC_URL> --account <operator-or-bond-owner>

After executableAt, any account can call executeSlash(proposalId) for a proposal without an appeal, or with a rejected appeal. The contract emits SlashExecuted. A ban also emits NodeBanUpdated. Keep your node logs and the dashboard event history as evidence for an appeal.

The exit queue

Collateral never leaves the registry at once. Each withdrawal goes to an exit queue for the exitDelay that is in effect at that time. Governance can set exitDelay from 1 day to 90 days. It must be longer than sortitionSubmissionWindow plus randomnessRequestTimeout. At deployment, exitDelay was 30 days on mainnet and on Sepolia.

Each withdrawal makes a queue entry with its own unlock time. An operator can have at most 64 open entries, and one more withdrawal reverts with TooManyTranches. Queued assets stay slashable until the claim. The claim always pays the bond owner.

A claim reverts in these conditions:

A deregistered operator stays a member of each committee that was already final. The collateral stays in the queue until each of these E3s completes or fails and its committee is released. After the E3 is terminal and its accusation window ends, any account can call releaseCommittee(e3Id) on CiphernodeRegistry. interfold ciphernode status lists these committees under Committees. A BondingRegistry with the obligation views returns their number in unresolvedCommitteesOf(operator) and each committee that it tracks in committeeObligationAt(operator, index). It does not track the committees requested before the upgrade that added these views. For those, and for an older registry, the command reads the CommitteeObligationUpdated events of BondingRegistry.

Leave the network

interfold --config /path/to/owner.yaml ciphernode deregister --operator 0xOPERATOR

interfold --config /path/to/owner.yaml ciphernode bond --operator 0xOPERATOR claim

Partial exits

To reduce the position without an exit, use the bond owner configuration:

# Queue ticket collateral (tFOLD units)
interfold --config /path/to/owner.yaml ciphernode tickets --operator 0xOPERATOR burn --amount 1000
# Queue FOLD from the ciphernode bond
interfold --config /path/to/owner.yaml ciphernode bond --operator 0xOPERATOR unbond --amount 1000
# Both in one command
interfold --config /path/to/owner.yaml ciphernode deactivate --operator 0xOPERATOR \
  --tickets 1000 --bond 1000

The operator stays active while the bond is at least 80 % of requiredCiphernodeBond (the default ciphernodeBondActiveBps) and the ticket count is at least minTicketBalance.

Register again

After the exit delay of a deregistration, the bond owner can fund and register the operator again:

interfold --config /path/to/owner.yaml ciphernode bond --operator 0xOPERATOR bond --amount 32000
interfold --config /path/to/owner.yaml ciphernode register --operator 0xOPERATOR
interfold --config /path/to/owner.yaml ciphernode tickets --operator 0xOPERATOR buy --amount 1000

A new registration starts a new admission cooldown if governance enabled one. A banned operator cannot register (CiphernodeBanned).

Actions

The Manage the position section of the hosted operator guide (opens in a new tab) sends each action that has a CLI command from a browser wallet.

Exit checklist

• No slash proposal against the operator is open.
• The deregistration transaction succeeded (CiphernodeDeregistrationRequested).
• The node ran until each E3 of its final committees completed or failed, and until the report deadline of each such E3 passed (its lifecycle deadline plus one day), so that it sent its slash reports.
• The exit delay ended (Exit pending: false).
• Each terminal committee of the operator is released.
• The claim succeeded and Pending exits shows tickets=0, bond=0.
• All rewards are claimed (pendingReward is 0 for each E3).
• The node is stopped and its supervisor cannot start it again.
• RPC credentials, firewall rules, and automation keys for the node are revoked.
• The local node data is deleted only after all claims are complete.

Next steps