Validator Threshold

The validator threshold requires Lightning Nodes to lock PL2. As a prerequisite to participate in the DON, Lightening Oracles lock a minimum amount of token. This collateral serves as a Proof-of-Stake (PoS) to secure the Decentralized Oracle Network (DON) and ensures Lightning Oracles hold a stake in the network.

Oracle validators must lock a threshold while they act as validators. They cannot remove this fixed amount of token from the smart contract during operations. In this regard, the threshold value of the oracle validator serves as a kind of bail.

LORCAs can increase their balance to exceed the validator threshold and as a result reach a better score to increase the likelihood of their services being elected more frequently.

Conceptually, the threshold value represents an option for penalties. In the future, potential misbehavior of LORCAs could be penalized. However, this feature was not enabled in the early versions of the DON. Penalties could be imposed if oracle validators provide false information and corrupt the channel consensus mechanism.

Applying penalties is also known as slashing. The two key misbehaviors that would lead to slashing are downtime and double signing. If oracle validators misbehave, their balance will be reduced. Penalties are a function of the effective balance, which triggers exit from the DON when the balance falls below the threshold. In essence, slashing is intended to deter and exclude bad actors while also incentivizing node security, availability, and network participation.

The validator threshold is subject to governance voting.