# Optimistic trust with stake slashing and strike-based bans

> **Settlement update (2026-07-04):** Alpha uses pending-balance forfeiture instead of stake slashing ([ADR-0015](0015-usdt-custodial-settlement.md)). Fraud detection, TOPLOC audits, and persisted reputation are specified in [ADR-0018](0018-fraud-detection-verification-and-reputation.md). The text below is the historical prototype design.

All inference responses are trusted by default. Validators re-run a random sample (~5%) of requests on reference nodes and compare outputs. Nodes that fail are slashed (stake reduced). Enough strikes result in a permanent on-chain ban.

For the prototype, the gateway emits validation events after completed requests. A validation event records the session id, model preset, request messages, observed output, and the route metadata for each node that served the request. The validator samples events with a configurable rate and deterministic seed for tests. Sampled events are re-run against a trusted reference node/reference function; string outputs must match exactly for stub models, while future tensor/model outputs use a configurable floating-point tolerance.

A slash proof is local contract-boundary state in the prototype. Submitting one reduces the offending node's stake, increments its strike count, logs a clear warning, and bans the wallet when the strike threshold is reached. The tracker excludes banned wallets from route selection, but routing is still not based on node token balance or stake size.

New wallets must complete N jobs without earning (probationary period) to raise the economic cost of re-entering after a ban — a banned node can't just create a new wallet and immediately cheat again; it must fund a new stake and contribute N free jobs first.

zkML (zero-knowledge proofs of inference) would give cryptographic guarantees but is 1000–10000× slower than inference for large models and is not production-ready. Redundant execution consensus (Gensyn's approach) gives stronger guarantees but costs 2–3× compute per request. TEE (trusted hardware attestation) is cryptographically strong but excludes most consumer GPUs, defeating the viral GPU-sharing goal. Optimistic + slash is the pragmatic choice that ships and can be calibrated economically.

## Considered Options

- **zkML**: cryptographically perfect, not production-ready for large models in 2025
- **Redundant consensus**: strong guarantees, 2-3× compute cost per request
- **TEE attestation**: strong guarantees, excludes consumer GPUs
- **Optimistic + slash + strike ban**: chosen — ships, works, economically tunable
