On ICON 1.0 we never implemented any sort of burning penalty, however, we have plans to implement a burning penalty on the bond of the P-Rep. Please see the details below and let us know if you have any strong feedback you would like us to consider:
Validation Penalty - This is currently live on ICON 1.0 and it will be the same on ICON 2.0. After missing 660 blocks, a P-Rep will be removed from block production until the next term. There is no burn associated with this and there will be no burn associated with this.
Accumulated Validation Penalty - This will be a new penalty. If a P-Rep receives 5 Validation Penalties within their last 30 chances, where a chance is defined as serving 1 term as a block producer, the P-Rep will be removed from block production and 20% of their bond will be burned. This penalty will be enforced on every validation penalty from 5 or more within the last 30 chances. In other words:
If a P-Rep get’s 5 validation penalties in the last 30 chances: burn 20% of current bond
If a P-Rep get’s 6 validation penalties in the last 30 chances: burn 20% of current bond
If a P-Rep get’s 7 validation penalties in the last 30 chances: burn 20% of current bond
etc. etc. etc.
The goal here is to remove a down node from block production since ranking is based on the amount of bond posted. If you are a Main P-Rep suffering this penalty over and over again, eventually you will drop to Sub P-Rep status as your bond continues to be slashed.
Overall, it is important for network stability to remove downed nodes from the block production rotation, and slashing the bond until the node drops out of rotation is a less harsh way of doing this versus complete disqualification.
Governance Slashing - this will stay as we agreed in IISS 3.0, minus the slashing associated with the Contribution Proposal System since the CPS management is no longer mandatory as described here.