Resolver Governance & Dispute Resolution

Overview

To enhance fairness and security in its validation and collateral systems, Cygnus introduces a flexible Dispute Resolution Framework. This framework is designed to manage and adjudicate slashing events that arise from operator misconduct or protocol violations.Rather than relying solely on automated slashing mechanisms, Cygnus incorporates Independent Resolution Entities (IREs)—which may include smart contracts, external committees, or decentralized arbitration protocols—to ensure slashing decisions are transparent, verifiable, and fair.

How It Works

1. Independent Resolution Entities (IREs)

In Cygnus, IREs function as governance or adjudication layers that review slashing proposals initiated by the network. These entities have the capacity to:

• Approve the execution of slashing penalties.

• Veto or reject slashing requests if they are found to be unjustified.

• Require additional evidence or initiate arbitration in the case of disputes.

2. Flexible Dispute Management

Operators and vaults providing collateral have the flexibility to define how their stakes are protected or exposed to slashing risk:

• Some collateral allocations may operate without any external review, relying entirely on automated enforcement.

• Others can be safeguarded by one or multiple IREs, which act as oversight layers before slashing is finalized.

• For example, a vault might designate:

  • 20% of its collateral under direct automated slashing.

  • 50% protected by IRE Committee A, responsible for a specific network segment.

  • 30% reviewed by IRE Committee B, covering broader protocol activities.

3. Decentralized Arbitration Options

Cygnus supports the integration of decentralized arbitration protocols such as:

• Reality.eth, Kleros, UMA, or any other governance mechanism compatible with the Cygnus framework. These systems can serve as dispute resolvers to adjudicate contentious slashing cases, enhancing neutrality and trust within the ecosystem.

4. Multi-Signature and Quorum Models

For additional security and decentralization, Cygnus enables multi-resolver setups where:

• A quorum of independent entities may be required to approve or veto slashing decisions.

• This ensures that no single party has unilateral control over slashing outcomes and provides stronger protection for participants.

Benefits of the Cygnus Dispute Resolution Framework

• Transparent Governance: Slashing decisions are subject to review and oversight, promoting fairness.

• Configurable Risk Exposure: Vaults can customize their collateral protection strategies according to risk tolerance and economic goals.

• Decentralized Oversight: Leverages established arbitration protocols for impartial dispute resolution.

• Enhanced Security: Quorum-based resolution mechanisms minimize risks of abuse or unilateral slashing decisions.

Cygnus’ Dispute Resolution Framework offers a highly adaptable and secure approach to managing slashing events. By integrating independent review layers and decentralized arbitration options, Cygnus ensures network integrity while fostering trust and fairness across its modular yield and validation ecosystem.