The Cosmos protocol punishes validators that don't follow protocol rules by slashing their bond along with the ATOMS delegated to them. If slashing happens during the 21-day unbonding period, the ATOMS being unbonded are also at risk.
There are different slashing triggers with varying levels of severity depending on the type of fault, but slashing primarily happens for one of the two reasons outlined below. We take these risks extremely seriously, and built our infrastructure to protect our customers and minimize slashing risk.
Double signing
If someone reports on chain A that a validator signed two blocks at the same height on chain A and chain B, the validator will get slashed on chain A.
Unavailability
If a validator’s signature has not been included in the last X blocks, the validator will get slashed by a marginal amount proportional to X. If X is above a certain limit Y, then the validator will get unbonded.
Read our help article about slashing for more information about what we do to minimize this risk.