What can cost stake
Health, offences, penalties, disputes, and exit: what each one costs, and how long you have.
Each Business Validator role backs its work with stake. If you break a rule, you can lose rewards, go to jail, or lose stake.
Real Testnet values from 2 Nov 2026.
Governance can change these values. They can differ on the main network. A dispute or a penalty that is already open keeps the values from its start. Protocol parameters lists each key. Penalties and disputes explains how a case moves from start to end.
In 30 seconds
- Health: keep your stake at 100% of the requirement. Below that, you take no new assets. Below 40%, you earn no rewards.
- Offences: a missed duty or an upheld dispute counts on your record for 12 months.
- Jail: offences 1 and 2 jail your whole institution for 7 days or 30 days. In jail, you get no rewards and no new assets, in every role.
- Stake: from offence 3, the protocol takes stake. At offence 5, you must leave. Some offences take stake every time.
- Disputes: anyone can file a claim against you, and voters decide. You can challenge an automatic penalty within 7 days.
Health
Health is your stake value divided by the stake your role needs. Stake and lifecycle explains how health differs from your status.
| Level | When | Effect |
|---|---|---|
| Healthy | Stake is at least 100% of the requirement | Full rewards. You can take new assets. |
| Degraded | 40% to under 100% | No new assets. Rewards fall with health: at 85% health, you get 85%. |
| Inactive | Under 40% | No rewards. No new assets. Your duties and penalties continue. |
| Price stale | The ASSET price is older than 7 days | No new assets for anyone. Health uses the last price. You cannot withdraw stake. Reward periods do not close. New disputes wait. Penalty challenges do not wait. An appeal of a claim waits, but its time keeps running. |
| No obligations | Nothing to back yet | Counts as Healthy. You can take new assets and bid. |
While the price is stale, three automatic penalties wait because they need a price: Record not confirmed, Token contract changed, and Claim paid late.
How much stake a role needs
Each band counts only the asset value inside it. The bands are in USD. Stake and bonds are in ASSET, at the protocol price. See worked examples.
| Asset value band | Stake rate |
|---|---|
| Up to $1,000,000 | 5% |
| $1,000,000 to $10,000,000 | 3.5% |
| $10,000,000 to $100,000,000 | 2.5% |
| Above $100,000,000 | 1.5% |
Other effects on rewards
- Rewards drop by 10% for each offence in the last 12 months. From 5 offences, they drop by half.
- A Scoring Validator must be Healthy to take a new asset. If the new asset takes it below Healthy, it gets 7 days to add stake. It counts as Healthy for those days, and it cannot take another asset in that time.
- A reward period on Real Testnet lasts 3 hours. See Rewards.
Offences
Each offence counts on your record for 12 months. From offence 3 means that the first two offences cost a jail term, not stake. Every time means that the offence takes stake at each step.
The contracts find automatic offences. Voters decide dispute offences. The protocol can take only the stake that the role holds. If the cost is larger, the rest cannot be collected.
Tokenization offences
| Offence | Cost | Takes stake | Stake goes to | Also |
|---|---|---|---|---|
| Record not confirmed: you did not confirm the asset record within 30 days after you recorded a change in the asset | 5% of the asset value | From offence 3 | Disaster Recovery Fund | The asset is Out of date at once |
| Token contract changed: the token contract changed without approval | 10% of the asset value | From offence 3 | Disaster Recovery Fund | The asset is Out of date at once |
| Token suite changed without notice: the change came without the 48 hours of notice | 10% of the asset value | From offence 3 | Disaster Recovery Fund | The asset is Out of date. For a shared suite, there is no penalty: the asset is only Out of date |
| Metadata mismatch: voters found that the record does not match its documents (dispute) | 20% of the asset value | From offence 3 | The filer | The asset is Out of date |
Another Tokenization Validator can take over an Out of date asset within 90 days. After that, the asset has no validator, and you still answer for it until it matures.
A change that nobody records starts no clock. Voters can still find a metadata mismatch.
Scoring offences
| Offence | Cost | Takes stake | Stake goes to | Also |
|---|---|---|---|---|
| Calibration test failed: your scores missed the outcomes by too much | 20% of Scoring stake | From offence 3 | Disaster Recovery Fund | None |
| No score for 90 days: an asset got no score in that time | 2% of Scoring stake for each 90 days missed, up to 8% in 12 months | Every time | Disaster Recovery Fund | Counts as an offence once per 90 days |
| Method mismatch: voters found that you did not follow your declared method (dispute) | 10% of Scoring stake | From offence 3 | The filer | None |
The calibration test uses at least 30 scores. It fails when your miss is more than 2× the standard error above the expected miss. See Scoring Validator.
Another missed score in the same period takes stake at once, up to the limit. It adds no offence and no jail. You cannot challenge it separately.
A method dispute uses the method on record now. A new declaration goes on record at once.
Insurance offences
| Offence | Cost | Takes stake | Stake goes to | Also |
|---|---|---|---|---|
| Claim paid late: an insurance claim was paid after 48 hours | 0.1% of the claim for each started day late, up to 5% | Every time | Disaster Recovery Fund | None |
| Claim not paid in 30 days: the claim was still unpaid after that time | All Insurance stake | Every time | Disaster Recovery Fund | Forced exit. Holders get a claim token for the unpaid amount |
| Underwriting fraud: voters found cover written on false terms (dispute) | All Insurance stake | Every time | The filer | Forced exit. No jail. The legal entity is banned for 5 years (1,825 days) |
Penalty steps
What one more offence costs depends on how many offences you had in the last 12 months.
| Offence in 12 months | Jail | Stake | Other |
|---|---|---|---|
| 1st | 7 days | Only for "every time" offences | None |
| 2nd | 30 days | Only for "every time" offences | None |
| 3rd and 4th | 7 days | Taken | None |
| 5th and later | 7 days | Taken | Forced exit from the protocol |
Jail: your whole institution earns no rewards and takes no new assets, in every role, until the jail ends. It ends by itself.
Penalty pending: a provisional penalty freezes the penalized role from the record until the penalty is final or reversed. The role gets no rewards and no new assets. If the step takes stake, the protocol holds that amount.
The count does not reset when the protocol takes stake. A reversed offence does not count.
A penalty can become final after 7 days if nobody challenges it. It needs a transaction, and anyone can send it. Until then, the freeze stays on. Penalties become final in order, oldest first. A dispute ruling counts only offences that are already final.
Challenge a penalty
If an automatic penalty is wrong, your institution can ask voters to reverse it within 7 days.
| Fact | Value |
|---|---|
| Who | The operator wallet of the penalized institution |
| When | Within 7 days of the record, while the penalty is pending |
| Bond | The larger of 100,000 ASSET or 10% of the stake held |
| Vote | 67% Yes reverses the penalty. Turnout and length follow the dispute rules. If the price was not reliable at the record, the strictest rules apply: 14 days of voting. If voters reverse the penalty, 7 days of review follow |
| Reversed | The penalty and the offence are removed. The held stake is released. The bond comes back. An Out of date asset stays Out of date |
| Too few votes | The penalty applies. The bond comes back |
| Dismissed | The penalty applies. The bond goes to the Disaster Recovery Fund |
| Not open for | Dispute rulings: they are final at once |
A dismissed challenge, or a challenge with too few votes, has no review and no appeal. The penalty applies at once.
Rewards and new assets stay frozen until the result applies. If there is a review, the result applies after the review.
Disputes
Anyone can file a claim against a validator. ASSET holders vote.
| Claim | Against | You provide | Contested value | Locked during the vote |
|---|---|---|---|---|
| Metadata mismatch | The asset's Tokenization Validator. The contract does not check this. Voters do | The asset | 20% of the asset value | That amount of its stake |
| Method mismatch | A Scoring Validator with a declared method | Nothing more | 10% of its Scoring stake | That amount |
| Underwriting fraud | An Insurance Validator | An evidence fingerprint | Half of its Insurance stake | All its Insurance stake |
The bond is the larger of 100,000 ASSET or 10% of the contested value. A claim needs more Yes than No. A penalty challenge needs 67% Yes. Voters get no reward and risk nothing.
There can be one open dispute for each set of target, claim type, and evidence. Anyone can file a dismissed claim again. Nobody can file an upheld claim again.
Vote rules by contested value
| Contested value | Turnout needed | Vote length | Review |
|---|---|---|---|
| Under $100,000 | 5% of circulating supply | 7 days | None |
| $100,000 to under $5,000,000 | 10% of circulating supply | 7 days | None |
| $5,000,000 or more | 15% of circulating supply | 14 days | 7 days after an upheld result, with a chance to appeal |
Governance records the circulating supply. Turnout counts the locked ASSET that voted, with no lock-age weight. Most of the supply is not locked, so a turnout can be hard to reach.
The Yes and No count uses voting weight: locked ASSET multiplied by the lock age. Only ASSET locked before the dispute opened counts.
| Lock age | Weight |
|---|---|
| Under 30 days | 0.5× |
| 30 days to under 180 days | 1× |
| 180 days or more | 1.5× |
Who loses what
| Result | Filer | Validator | Voters |
|---|---|---|---|
| Upheld | The bond comes back. The filer gets the stake that the protocol takes | One more offence. The penalty steps set the cost | Nothing |
| Dismissed | The bond goes to the Disaster Recovery Fund | The locked stake is released | Nothing |
| Too few votes | The bond comes back | The locked stake is released | Nothing |
Bonds and won stake do not arrive by themselves. You must claim them.
Appeal
Only an upheld large result gets a review of 7 days. Large means a contested value of $5,000,000 or more, or a penalty challenge under the strictest rules. A dismissed result, or a result with too few votes, applies at once. Nobody can appeal it.
| Fact | Value |
|---|---|
| Who can appeal | Anyone, once per dispute |
| When | Within 3 days after the vote result |
| Bond | The larger of 500,000 ASSET or 5% of the contested value. Send the exact amount: the contract keeps all that you send |
| Vote | Until the review ends. 25% of circulating supply must vote. 67% Yes reverses the result |
| Appeal passes | The result is reversed. The filer's bond goes to the Disaster Recovery Fund. The appeal bond comes back |
| Appeal fails | The result applies. The appeal bond goes to the Disaster Recovery Fund. If the filer also appealed, the filer loses both bonds |
| No appeal | After the review ends, anyone can send the transaction that applies the result |
Leave the protocol
An institution leaves with all its roles at once. Exit and wind-down explains the steps.
| Fact | Tokenization | Scoring | Insurance |
|---|---|---|---|
| Notice | 90 days | 90 days | 180 days |
| During the notice | Duties continue. Rewards × 0.5 for the whole institution | Duties continue. Rewards × 0.5 for the whole institution | Duties continue. Rewards × 0.5 for the whole institution |
| After the notice | Your service stops in steps. A keeper usually sends the transactions. Stake stays locked | Your service stops in steps. A keeper usually sends the transactions. Stake stays locked | The policy book goes to an auction |
| Stake you still answer for | Each asset, until another Tokenization Validator takes it over or the asset matures | Each asset you scored, until another Scoring Validator replaces you or the asset matures | Open claims, the winning premium, and all remaining stake if no bid wins |
You cannot withdraw stake during the exit. After the exit, you can withdraw only the stake above what your remaining assets require.
Rewards are × 0.5 until the longest notice of your roles ends. After that, you earn no rewards.
A forced exit has no notice. It follows the 5th offence, an unpaid claim, upheld fraud, or a governance decision.
Healthy insurers place sealed bids for 3 days. Reveal closes 7 days after the auction opens. The lowest premium wins if it fits the stake of the leaving insurer and the winner stays Healthy. The bid bond has no minimum. A bidder that does not reveal loses its bond. The contract pays the winning premium from the stake of the leaving insurer. With no winning bid, each holder gets a claim token, and all remaining stake goes to the Disaster Recovery Fund.
A book with no active policies has no winning bid. An insurer with no live policies still goes through the auction, and it loses all its remaining stake. Withdraw free stake before you send the notice. A forced exit gives you no time to do this.
An insurer can hold at most 1,000 policies. The contract also has a fixed limit of 1,000.
Deadlines
When each duty is due, and what happens when it is missed. Each result needs a transaction. Anyone can send it.
| Deadline | Length | Starts | If missed | Who acts |
|---|---|---|---|---|
| Confirm an asset record | 30 days | You record a change in the asset | Offence. The asset is Out of date | Tokenization |
| Announce a token suite change | 48 hours before | The announcement | The change counts as without notice | Tokenization |
| Make the announced change | 14 days | End of the notice | The notice expires | Tokenization |
| Take over an Out of date asset | 90 days | Out of date | The asset has no validator | Another Tokenization Validator |
| Publish a score | Every 90 days for each asset | Last score | Offence, 2% for each 90 days | Scoring |
| New method | On record at once. The event shows a date 30 days later. Voters can use that date. The contracts do not enforce it | Declaration | None | Scoring |
| Add stake after a new asset takes you below Healthy | 7 days | New scoring asset | Health counts as real again | Scoring |
| Stop scoring one asset | 90 days of notice | Exit notice | None | Scoring |
| Calibration result | Windows of 90 days. The outcome comes after 1 year (365 days) plus 48 hours | Window close | An overdue test blocks new scoring assets | Anyone. A keeper usually does |
| Pay an insurance claim | 48 hours | Missed issuer payment | 0.1% a day, up to 5% | Insurance |
| Final limit for a claim | 30 days | Missed issuer payment | All Insurance stake. Forced exit | Insurance |
| Auction bids and reveal | Bids for 3 days. Reveal until 7 days after the auction opens | Auction open | The bond is lost if the bid is not revealed | Insurance bidders |
| Challenge a penalty | 7 days | Penalty record | The penalty becomes final | Penalized operator |
| Dispute vote | By contested value. See vote rules | Filing | The result applies | Voters |
| Appeal | 3 days | Vote result | The result applies | Anyone |
| Review | 7 days | Vote end | The result applies | Anyone. A keeper usually does |
| Leave notice | 90 days / 90 days / 180 days | Request | None: the notice is a wait, not a duty | Operator |
| Jail | 7 days or 30 days | Offence | Ends by itself | None |
| Offence record | 12 months | Offence | Leaves the count | None |
| Ban after fraud | 5 years (1,825 days) | Ruling | None | None |
| Price age | 7 days | Last price | Price stale | Price setter |
Words
The glossary defines the words on this page. See Out of date, contested value, turnout, and voting base.