Yes, slashing is not needed in Ouroboros. This has been thoroughly researched and by now has been battle-tested as well.
Slashing, or any punitive measures for that matter, are low hanging fruit, the easy way out, and comes with collateral damage, as it doesn't only punish the validator, but also the users staking with them. On top of that, seeing how Ethereum's mechanics enable(d) staking cartels to form, nearly a third of stake resides with a single pool. When Lido would decide to resort to questionable practices, and it would come to a vote if their validators need to be slashed, do you think that the majority would vote yes and see their billions in staked ETH disappear and send the value of STETH to 0? Causing a cascade of liquidations as LSDs like these are being used as collateral?
There's a lot wrong with employing slashing as a mechanic.
Would you put billions of dollar in defi protocol on a blockchain with no slashing?
Yes, slashing is not needed in Ouroboros. This has been thoroughly researched and by now has been battle-tested as well.
Slashing, or any punitive measures for that matter, are low hanging fruit, the easy way out, and comes with collateral damage, as it doesn't only punish the validator, but also the users staking with them. On top of that, seeing how Ethereum's mechanics enable(d) staking cartels to form, nearly a third of stake resides with a single pool. When Lido would decide to resort to questionable practices, and it would come to a vote if their validators need to be slashed, do you think that the majority would vote yes and see their billions in staked ETH disappear and send the value of STETH to 0? Causing a cascade of liquidations as LSDs like these are being used as collateral?
There's a lot wrong with employing slashing as a mechanic.
Thank you for the complete answer, giving me food for thoughts.