Destination of Slashed Funds in Basket Module Unclear

[kmlbgn]

PR #610 (commit c4d2476) added new hooks to the basket module for handling validator slash events. However, it's not clear where the slashed funds go when the basket pool weight of a slashed validator is reduced.

sekai/x/basket/keeper/hooks.go

Lines 60 to 81 in c4d2476

	func (k Keeper) AfterSlashStakingPool(ctx sdk.Context, valAddr sdk.ValAddress, pool multistakingtypes.StakingPool, slash sdk.Dec) {
	rates := k.tk.GetAllTokenRates(ctx)
	for _, rate := range rates {
	if rate.StakeToken {
	basket, err := k.GetBasketByDenom(ctx, fmt.Sprintf("sdb/%s", rate.Denom))
	if err != nil {
	continue
	}
	shareDenom := multistakingtypes.GetShareDenom(pool.Id, rate.Denom)
	for i, token := range basket.Tokens {
	if token.Denom == shareDenom {
	basket.Tokens[i].Weight = token.Weight.Mul(sdk.OneDec().Sub(slash))
	basket.Tokens[i].Deposits = true
	basket.Tokens[i].Withdraws = true
	basket.Tokens[i].Swaps = true
	}
	}
	k.SetBasket(ctx, basket)
	}
	}
	}

As per KIP :

The slashed tokens, including KIRA's native token KEX, are transferred to a governance-controlled community spending pool where a decision can be made regarding their final fate

[kiragpg]

This is reducing the weight of an asset since that asset's value has been decreased from slashing underlying tokens. Therefore the slash handling should be actualy done in multistakingi module - not on basket module.
Here's where it handles slashed tokens

func (k Keeper) SlashStakingPool(ctx sdk.Context, validator string, slash sdk.Dec) {
	pool, found := k.GetStakingPoolByValidator(ctx, validator)
	if !found {
		return
	}
	pool.Slashed = slash
	pool.Enabled = false

	totalStakingTokens := sdk.Coins{}
	for _, stakingToken := range pool.TotalStakingTokens {
		totalStakingTokens = totalStakingTokens.Add(sdk.NewCoin(stakingToken.Denom, sdk.NewDecFromInt(stakingToken.Amount).Mul(sdk.OneDec().Sub(pool.Slashed)).RoundInt()))
	}
	totalSlashedTokens := sdk.Coins(pool.TotalStakingTokens).Sub(totalStakingTokens...)
	pool.TotalStakingTokens = totalStakingTokens

	defaultDenom := k.sk.DefaultDenom(ctx)
	defaultDenomAmount := totalSlashedTokens.AmountOf(defaultDenom)
	burnAmount := sdk.Coins{sdk.NewCoin(defaultDenom, defaultDenomAmount)}
	err := k.bankKeeper.BurnCoins(ctx, types.ModuleName, burnAmount)
	if err != nil {
		panic(err)
	}

	treasurySendAmount := totalSlashedTokens.Sub(burnAmount...)
	err = k.bankKeeper.SendCoinsFromModuleToModule(ctx, types.ModuleName, authtypes.FeeCollectorName, treasurySendAmount)
	if err != nil {
		panic(err)
	}
	feesTreasury := k.distrKeeper.GetFeesTreasury(ctx)
	feesTreasury = feesTreasury.Add(treasurySendAmount...)
	k.distrKeeper.SetFeesTreasury(ctx, feesTreasury)

For KEX tokens it's burnt. For non-KEX tokens, it's sent to fees treasury that can be controlled by governance.