Stakely provides all the security measures, including monitoring and control of its nodes, in order to prevent a slash incident from occurring on any of them. Given the number of agents involved in a blockchain’s consensus and the difficulty of guaranteeing 100% security of any computer system, we define Stakely's Staking Insurance Program, a product designed to protect the funds of delegators in case Stakely's validators were affected by a slash incident.

What is this Staking Insurance Program?

Stakely will provide insurance protection for delegators and it will come from a percentage of the fees earned each month, which will be deposited in an Ethereum wallet 0x2B1D879B5e102e60166202de79537B48E2F18a42 in a stable currency DAI/USDC/USDT. The corresponding amount will be placed in a DeFi product in order to increase its value over time and to cover as much capital as possible. This DeFi product will initially be Yearn and is subject to change at any time by Stakely to improve profitability. The current value of the insurance can be checked by the link below:

Up to 90 % of the capital raised will be used to return the funds lost in the event of a slash incident to Stakely’s delegators, which can be returned either in stable currencies or in the affected validator’s currency. Stakely will be solely responsible for making the final decision.

The return of funds will be calculated on the basis of two factors: (i) the average balance of the last 30 calendar days in this delegation; (ii) the amount corresponding to the slash loss, the formula being as follows:

In case the average balance of the last 30 calendar days is higher than the amount corresponding to the slash loss, the second item shall be taken into account.

In the event that the total sum of the refunds exceeds 90% of Stakely's insurance funds, a proportional distribution shall be calculated among all concerned using the above formula.

Eligible validators

This programme concerns Stakely validators having a fee equal to or greater than 1 % and who have been operating with a fee equal to or greater than 1% for at least 30 days before the slash incident to be covered occurred.

This programme shall not apply to validators who have their own slash insurance.

This programme shall not apply to validators with unlisted nor unmarketable currencies.

Eligible delegators

This programme will cover delegators whose losses are valued at more than $10. To calculate the losses due to the slash incident, Stakely will take the dollar value of the validator's currency on the day the slash occurs, taking as value the one indicated on Coingecko.

Affected balance

The affected balance is the balance that has been deducted from the delegator’s account due to the slash incident, as long as it exceeds the amount of $10.

What slash incidents are not covered?

• Widespread slash incidents where more than 25% of the network has been affected, this 25% being calculated by total stake or by number of validators; in either case, it is not covered by Stakely's insurance guarantee.
• Slash incidents not caused by Stakely errors, but in code development by the official validator software development teams.
• Slash incidents caused by lack of network’s consensus as a result of sybil-type network attacks.

What slash incidents are covered?

• Slash for downtime or poor performance.
• Slash due to double-signing.
• Other types of slash for which Stakely's team is solely and exclusively responsible for poor operation or management.

Enforcement procedure

Once a slash incident has been detected in a Stakely validator and meets the criteria to be accepted under Stakely's Staking Insurance Program, Stakely will prepare the refund details for each affected account, publishing this information and the means of refund within a maximum period of 30 calendar days. This communication will be sent through Stakely's official media: Twitter and Telegram.

In the event that the refund is made in the same currency affected, any user who wishes to validate or claim any discrepancy found in the list presented by Stakely will have a period of 5 days from the publication of the announcement. In the event that the refund is made in a stable currency, users will have a period of 15 days to follow the procedure that Stakely will announce, where the account in which they wish to receive the refund will be provided and where they can validate or claim any discrepancy with respect to the list presented by Stakely.

At the end of the period for claims and rectification, no claims or modifications will be accepted and the refund will be made at the end of the slash incident.

All deadlines described here may be extended by official communication if necessary to ensure a fair and transparent process.