diff --git a/spartan/environments/network-defaults.yml b/spartan/environments/network-defaults.yml
index c918dcddc515..4d0f251951d4 100644
--- a/spartan/environments/network-defaults.yml
+++ b/spartan/environments/network-defaults.yml
@@ -265,10 +265,10 @@ networks:
     AZTEC_GOVERNANCE_PROPOSER_ROUND_SIZE: 100
     AZTEC_GOVERNANCE_PROPOSER_QUORUM: 60
     AZTEC_MANA_TARGET: 75000000
-    AZTEC_PROVING_COST_PER_MANA: 25000000
+    AZTEC_PROVING_COST_PER_MANA: 12500000  # AZIP-16: halved to track v5 prover-cost reduction
     AZTEC_SLASH_AMOUNT_SMALL: 100000e18
-    AZTEC_SLASH_AMOUNT_MEDIUM: 100000e18
-    AZTEC_SLASH_AMOUNT_LARGE: 100000e18
+    AZTEC_SLASH_AMOUNT_MEDIUM: 250000e18  # AZIP-16: MEDIUM/LARGE raised 2.5x vs SMALL
+    AZTEC_SLASH_AMOUNT_LARGE: 250000e18
     # Network identity
     L1_CHAIN_ID: 11155111  # Sepolia
     # Genesis state
@@ -282,19 +282,19 @@ networks:
     # P2P
     P2P_MAX_PENDING_TX_COUNT: 1000
     P2P_TX_POOL_DELETE_TXS_AFTER_REORG: true
-    # Slasher penalties
-    SLASH_DATA_WITHHOLDING_PENALTY: 10e18
+    # Slasher penalties - mirrors mainnet class assignments (SMALL=100000e18, LARGE=250000e18, or 0)
+    SLASH_DATA_WITHHOLDING_PENALTY: 0
     SLASH_INACTIVITY_TARGET_PERCENTAGE: 0.9
     SLASH_INACTIVITY_CONSECUTIVE_EPOCH_THRESHOLD: 1
-    SLASH_INACTIVITY_PENALTY: 10e18
-    SLASH_PROPOSE_INVALID_ATTESTATIONS_PENALTY: 10e18
-    SLASH_DUPLICATE_PROPOSAL_PENALTY: 10e18
-    SLASH_DUPLICATE_ATTESTATION_PENALTY: 10e18
-    SLASH_PROPOSE_DESCENDANT_OF_CHECKPOINT_WITH_INVALID_ATTESTATIONS_PENALTY: 10e18
-    SLASH_ATTEST_INVALID_CHECKPOINT_PROPOSAL_PENALTY: 10e18
-    SLASH_UNKNOWN_PENALTY: 10e18
-    SLASH_INVALID_BLOCK_PENALTY: 10e18
-    SLASH_INVALID_CHECKPOINT_PROPOSAL_PENALTY: 0
+    SLASH_INACTIVITY_PENALTY: 100000e18
+    SLASH_PROPOSE_INVALID_ATTESTATIONS_PENALTY: 100000e18
+    SLASH_DUPLICATE_PROPOSAL_PENALTY: 250000e18  # AZIP-16: activated at LARGE
+    SLASH_DUPLICATE_ATTESTATION_PENALTY: 250000e18  # AZIP-16: activated at LARGE
+    SLASH_PROPOSE_DESCENDANT_OF_CHECKPOINT_WITH_INVALID_ATTESTATIONS_PENALTY: 0  # AZIP-16: deferred to subsequent release
+    SLASH_ATTEST_INVALID_CHECKPOINT_PROPOSAL_PENALTY: 0  # AZIP-16: deferred to subsequent release
+    SLASH_UNKNOWN_PENALTY: 100000e18
+    SLASH_INVALID_BLOCK_PENALTY: 100000e18
+    SLASH_INVALID_CHECKPOINT_PROPOSAL_PENALTY: 100000e18  # AZIP-16: activated at SMALL
     SLASH_GRACE_PERIOD_L2_SLOTS: 64
     ENABLE_VERSION_CHECK: true
 
@@ -306,8 +306,8 @@ networks:
     AZTEC_EJECTION_THRESHOLD: 100000e18
     AZTEC_LOCAL_EJECTION_THRESHOLD: 190000e18
     AZTEC_SLASH_AMOUNT_SMALL: 2000e18
-    AZTEC_SLASH_AMOUNT_MEDIUM: 2000e18
-    AZTEC_SLASH_AMOUNT_LARGE: 2000e18
+    AZTEC_SLASH_AMOUNT_MEDIUM: 5000e18  # AZIP-16
+    AZTEC_SLASH_AMOUNT_LARGE: 5000e18  # AZIP-16
     AZTEC_SLASHING_LIFETIME_IN_ROUNDS: 34
     AZTEC_SLASHING_EXECUTION_DELAY_IN_ROUNDS: 28
     AZTEC_SLASHING_VETOER: "0xBbB4aF368d02827945748b28CD4b2D42e4A37480"
@@ -315,7 +315,7 @@ networks:
     AZTEC_GOVERNANCE_PROPOSER_QUORUM: 600
     AZTEC_GOVERNANCE_PROPOSER_ROUND_SIZE: 1000
     AZTEC_MANA_TARGET: 75000000
-    AZTEC_PROVING_COST_PER_MANA: 25000000
+    AZTEC_PROVING_COST_PER_MANA: 12500000  # AZIP-16: halved to track v5 prover-cost reduction
     AZTEC_EXIT_DELAY_SECONDS: 345600  # 4 days
     AZTEC_SLASHING_DISABLE_DURATION: 259200  # 3 days
     AZTEC_ENTRY_QUEUE_BOOTSTRAP_VALIDATOR_SET_SIZE: 500
@@ -348,11 +348,11 @@ networks:
     SLASH_INACTIVITY_CONSECUTIVE_EPOCH_THRESHOLD: 2
     SLASH_INACTIVITY_PENALTY: 2000e18
     SLASH_PROPOSE_INVALID_ATTESTATIONS_PENALTY: 2000e18
-    SLASH_DUPLICATE_PROPOSAL_PENALTY: 2000e18
-    SLASH_DUPLICATE_ATTESTATION_PENALTY: 2000e18
-    SLASH_PROPOSE_DESCENDANT_OF_CHECKPOINT_WITH_INVALID_ATTESTATIONS_PENALTY: 2000e18
-    SLASH_ATTEST_INVALID_CHECKPOINT_PROPOSAL_PENALTY: 2000e18
+    SLASH_DUPLICATE_PROPOSAL_PENALTY: 5000e18  # AZIP-16: activated at LARGE
+    SLASH_DUPLICATE_ATTESTATION_PENALTY: 5000e18  # AZIP-16: activated at LARGE
+    SLASH_PROPOSE_DESCENDANT_OF_CHECKPOINT_WITH_INVALID_ATTESTATIONS_PENALTY: 0  # AZIP-16: deferred to subsequent release
+    SLASH_ATTEST_INVALID_CHECKPOINT_PROPOSAL_PENALTY: 0  # AZIP-16: deferred to subsequent release
     SLASH_UNKNOWN_PENALTY: 2000e18
     SLASH_INVALID_BLOCK_PENALTY: 2000e18
-    SLASH_INVALID_CHECKPOINT_PROPOSAL_PENALTY: 0
+    SLASH_INVALID_CHECKPOINT_PROPOSAL_PENALTY: 2000e18  # AZIP-16: activated at SMALL
     SLASH_GRACE_PERIOD_L2_SLOTS: 1200
diff --git a/spartan/environments/staging-public.env b/spartan/environments/staging-public.env
index ef03a277c131..4037a6e06f9d 100644
--- a/spartan/environments/staging-public.env
+++ b/spartan/environments/staging-public.env
@@ -30,7 +30,7 @@ SPONSORED_FPC=false
 # Match testnet/mainnet mana target (75M) instead of global default (100M).
 # AZTEC_MANA_TARGET only takes effect on L1 contract redeployment.
 AZTEC_MANA_TARGET=75000000
-AZTEC_PROVING_COST_PER_MANA=25000000
+AZTEC_PROVING_COST_PER_MANA=12500000
 # Cap sequencer block mana to match 75M target (75M * 2 = 150M limit).
 # This takes effect immediately on node restart, even without L1 redeployment.
 SEQ_MAX_L2_BLOCK_GAS=150000000
diff --git a/spartan/environments/testnet.env b/spartan/environments/testnet.env
index eae96f2f61f7..b6170953e3d2 100644
--- a/spartan/environments/testnet.env
+++ b/spartan/environments/testnet.env
@@ -25,10 +25,10 @@ AZTEC_SLASHING_LIFETIME_IN_ROUNDS=5
 AZTEC_SLASHING_EXECUTION_DELAY_IN_ROUNDS=2
 AZTEC_SLASHING_VETOER=\"0xdfe19Da6a717b7088621d8bBB66be59F2d78e924\"
 AZTEC_MANA_TARGET=75000000
-AZTEC_PROVING_COST_PER_MANA=25000000
+AZTEC_PROVING_COST_PER_MANA=12500000
 AZTEC_SLASH_AMOUNT_SMALL=100000e18
-AZTEC_SLASH_AMOUNT_MEDIUM=100000e18
-AZTEC_SLASH_AMOUNT_LARGE=100000e18
+AZTEC_SLASH_AMOUNT_MEDIUM=250000e18
+AZTEC_SLASH_AMOUNT_LARGE=250000e18
 AZTEC_ACTIVATION_THRESHOLD=200000e18
 AZTEC_EJECTION_THRESHOLD=100000e18
 AZTEC_GOVERNANCE_PROPOSER_ROUND_SIZE=100