Bond

In the blockchain context, a bond refers to collateral that participants in decentralized networks must lock up, or stake, in advance via smart contracts. This staked bond is forfeited, or “slashed,” as a penalty if the participant fails to perform their duties.

For example, in optimistic bridges like Pheasant Network, relayers must deposit a bond before they can start facilitating bridge transactions. They risk having this bond slashed if they execute fraudulent or erroneous transactions. Optimistic rollups employ the same bond system but involve sequencers instead of relayers.

This bond-and-slash mechanism acts as a financial deterrent against behaviors that conflict with the network’s benefits and encourages participants to act in the network’s best interests. This is crucial for maintaining the security and integrity of decentralized, anonymous networks.