Penalties and disputes

Two ways a case begins

The contracts can check some failures against their own state. Examples are an overdue update, a calibration result, or a claim still unpaid after its deadline. A caller triggers the check, and the contract verifies the condition.

Other allegations need evidence from outside the chain. A timestamp alone cannot show that an asset record misrepresents an instrument, or that underwriting was fraudulent. These claims go to a dispute: the filer posts a bond, and a vote decides the case.

Automatic does not mean immediately final

When a contract verifies an offence, it creates a provisional penalty. The provisional penalty records the assessment and reserves collateral. It also applies restrictions such as jail (a temporary suspension), a new-volume freeze, and a reward freeze. The final stake debit, and any recovery or forced-exit effects, wait until the case is resolved.

One exception: a Scoring Validator can miss its publication cadence again in a period that already has a missed-cadence penalty. That extra rate debit applies at once. It is capped, adds no ladder step or jail, and you cannot challenge it separately.

The current operator of the BVID (Business Validator identity) can challenge an eligible provisional penalty within its challenge window. If nobody challenges it, it can be finalized after that window. A challenge follows the dispute process. If the penalty is reversed, the reservation is released and the provisional contribution is undone. Other, independent restrictions can still apply.

Dashboards must keep these states apart: an observed offence, an open challenge, and a completed slash (a final collateral debit) are different states.

Penalty progression

How disputes resolve

On the dashboard Disputes page, use File a dispute, or open a dispute to vote. To get voting weight, open Your voting power and lock ASSET.

A filer names a supported claim and posts an ASSET bond. The protocol calculates the contested amount from the referenced records. Voting uses eligible locked positions from before the filing block. So voting power acquired after the filing does not change that dispute's snapshot.

Quorum and approval are separate checks. Quorum compares raw eligible turnout with the supply snapshot. Approval uses weighted votes. A challenge to a contract-verified penalty needs a higher approval threshold. Large cases can go to an additional review and Overturn stage.

The filer must check the actual deadlines, bond, and state of the case. A failed allegation, a missed quorum, and a successful challenge can each send bonds or collateral to different places. A ruling that comes from a dispute does not start another automatic-penalty challenge cycle.

Consequences depend on the failure

The penalty ladder escalates repeated offences in steps: jail, then longer jail, then slashing. Some calculated debits apply without waiting for the ordinary flat-penalty slash step. Fraud and severe insurance failures can trigger stronger consequences and a forced exit.

A slash can use up all of the role's available collateral. If the assessed loss is larger, no extra ASSET becomes recoverable. Enforcement records should show the assessed amount and the collected amount separately.

What to monitor

Track provisional penalties and dispute IDs, response deadlines, reserved collateral, final outcomes, and transaction receipts. Restore operational compliance as well as collateral. Adding stake does not dismiss a dispute or undo a confirmed offence.

Governance sets the relevant thresholds and windows as parameters, and they can change. What can cost stake lists what each offence costs and each deadline. Protocol parameters lists the Real Testnet values.