Validator Cartels

Validator cartels occur when a group of validators in a proof-of-stake or delegated proof-of-stake system collude to maximize their collective rewards or influence over the network. By coordinating their actions, these validators can manipulate block production, censor specific transactions, or influence governance proposals to benefit their group.

This behavior undermines the decentralization of the network and can lead to increased security risks. Cartels often emerge when the cost of coordination is low and the potential for increased profit is high.

To combat this, protocols implement mechanisms such as slashing, where malicious or colluding validators lose their staked capital, and randomization techniques to select validators for block production. Monitoring for signs of collusion, such as correlated block production or synchronized voting patterns, is a critical component of maintaining the health and security of the network.