Bonding and slashing
How Kimp Index reporters bond $KIMP, how automatic flags and proven deviations lead to slashing, and where slashed funds go.
Every reporter posts a bond in $KIMP. The bond is what a reporter loses if it publishes values that do not match the market. This page covers the bond, automatic flagging, and the two slashing paths.
Bond parameters#
| Parameter | Value |
|---|---|
| Bond asset | $KIMP |
| Minimum bond | Set by governance before mainnet |
| Unbonding period | 14 days |
| Slashable during unbonding | Yes |
| Flag threshold | Report more than 25 bps from the finalized median |
| Automatic slash trigger | 3 flags within 24 hours |
| Automatic slash amount | 10% of bond, plus suspension |
| Dispute slash amount | Up to 50% of bond |
Why a bond#
The median already limits the damage any single reporter can do. The bond adds a cost to trying. A reporter that submits careless or manipulated values loses part of its stake, and a set of colluding reporters would put all of their bonds at risk. The minimum bond is sized by governance relative to the open interest the index secures.
Automatic flagging#
After an epoch is finalized, the KimpIndex contract compares every valid report for that asset against the finalized median. A report that deviates by more than 25 bps is flagged. No human judgment is involved.
Example: the BTC median for an epoch is 248 bps, and two reports were 230 and 275 bps. The 230 report deviates by 18 bps and is not flagged. The 275 report deviates by 27 bps and is flagged.
Why 25 bps#
Honest reporters sampling the same venues within the same minute usually land within a few basis points of each other. Differences come from retrieval timing and last-trade variation. A 25 bps tolerance absorbs this noise while catching feeds that are stale, misconfigured or manipulated.
Three flags in 24 hours#
Flags are counted per reporter across all assets over a rolling 24-hour window. On the third flag:
- 110% of the reporter's bond is slashed and burned.
- 2The reporter is suspended. Its reports are rejected and it no longer counts toward the active set.
- 3Reinstatement requires a governance action through the timelock, after the reporter restores its bond to at least the minimum.
A single flag has no penalty. Occasional outliers happen to honest operators. Repeated outliers within a day indicate a systematic problem.
Slashing by dispute#
Automatic flagging only catches reporters that disagree with the median. It cannot catch a median that is itself wrong. For that, anyone can open a dispute with timestamped source-exchange data as evidence. If the Dispute Committee upholds it:
- Up to 50% of the reporter's bond is slashed.
- Half of the slashed amount goes to the challenger.
- Half of the slashed amount is burned.
- The challenger's dispute bond is returned.
If the dispute is rejected, the dispute bond is forfeited to the reporter. The full procedure is in Dispute rules.
Where slashed funds go#
| Path | Challenger | Burned | Reporter |
|---|---|---|---|
| Automatic slash (3 flags) | None | 100% of slashed amount | Loses 10% of bond |
| Dispute upheld | 50% of slashed amount plus bond returned | 50% of slashed amount | Loses up to 50% of bond |
| Dispute rejected | Loses dispute bond | None | Receives dispute bond |
Burning reduces the total supply of $KIMP. See Buyback and burn.
Unbonding#
A reporter that leaves the set waits 14 days before its bond is released. The bond stays slashable for the whole period. Flags and disputes raised against epochs before exit are still enforced.