Correlated downtime penalties got their first update in ~2 years as they're considered for inclusion in Hegota! Tl;dr:
- This EIP increases downtime penalties temporarily if a large amount of the network goes offline together. The goal is to penalise all stake piling onto the same few operators and datacenters, which has become a significant issue over the last 5 years.
- The original design was a tiny blip of penalties, not enough to change behaviour, nor enough to justify the dev effort. Now the penalties can scale up to 128x from the baseline penalty.
- This is still pretty small in terms of your principal, but can set you back weeks or more of rewards if you stake in a centralised manner that has an extended outage. (Worst case is ~0.38% of principal per day if you and a third of the network are offline, which is more than a month of lost rewards)
- Focusing on the source + target vote ensures short term failures in block production won't trigger this penalty.
- This penalty caps at 33% of stake offline, after that, its the existing inactivity leak that punishes you further, (which has a lot more teeth!).
Check out some example payback times, and a new vs old graph to show why the update is needed.
Hopefully the Core Devs will include EIP-7716 in Hegota, and Ethereum can start to value its decentralisation rather than taking it for granted before its all gone. Ask your local core dev to SFI EIP-7716!