How and when Distribuited-Validator-Technology will change ETH staking by Ariel Zimroni @ssv_network

Transcript

everyone great to be here my name is Ariel from SSV Network and today I'm going to talk about DVT and how it's going to change ethereum staking so SSV at SSV we're developing a DVT which is also a distributed Wilder Tech and our Grand Vision is to decentralize the ethereum we do this with the core belief that the term security should be in the hands of as many people or as many entities or as many node operators as we can but vulnerable to none of them you know I think this notion really set ups the stage in order to understand exactly what DVT enables us to do but I would like to start first with the question of why do we even need it

so looking at the current state of ethereum is taking it's pretty obvious that stake centralization is a big issue and a risk factor there's a few entities controlling a big percentage of the stake we have the centralized exchanging leading staking we have Lido pretty much dominating the liquid staking and this is very problematic not only because of the amount of stake that they manage but also due to the fact that the bigger they are the bigger the systematic risk on ethereum on ethereum's ecosystem which really affects all of us because these single entities are more susceptible to censorship and regulation risks I think we all witnessed a month ago when the state came cracking down on crack and staking a program

and also due to economics of scale and staking they're just not enough incentives in place for large providers to decentralize their infrastructure which really contributes to effects client diversity and contributes to potential single points of failure so what is DVT and how can it help us transition to a more decentralized ethereum so DVT or distributed valuer technology is a new tech primitive in the evolving ethereum Tech stack that enables multiple non-trusting parties to run and operate an ethereum validator collaboratively it works by taking a validator key and splitting it up to a set of key shares

and distributing those shares to operators within something that we call as a cluster or a validator cluster now each operator in this cluster has a share out of the complete key and once a duty comes in they each use that chair to partially sign it and then through a consensus they all aggregated the signatures to a full signature and broadcast it as a full and valid Duty on the beacon chain these operators they have a share and they can't use that chair to reconstruct the full key meaning they only need the share to operate so you no longer need to have the signing key in a hot wallet which was a very big security concern in the current ethereum validator setup

um and also these operators in the in the cluster can operate using different setups right they can use different clients they can use different data centers different Cloud providers different locations so you can achieve greater client diversity when you compare it to the single uh or standard traditional validator setup that has one set of each now because we use thresholds say signing in a consensus protocol you kind of have a fault tolerance built inside of this thing so in case one operator will go offline it will not affect the overall performance of the validator and it will continue to work as long as a threshold is met which really means that you can save a lot of a cost operational cost in insurance and redundancies and

backups with that said the benefits of DVT are pretty substantial right this shift in the validator operations significantly increase the liveness and security of the ethereum network will also dramatically reduces slashing downtime or centralization risk when you compare it to the traditional validator setups and by improving the resiliency of ethereum validators and the term consensus level we can help make ethereum more decentralized and a secure network for the rest of us so what can you do with this thing because after all it's infrastructure and infrastructure is supposed to be used in some way so off the bat you can build some great staking pools and liquids taking pools using DVT having

more operators operate each validators means that you have more operator participation means that you have the risk shared between more people so the risk is reduced but also in a way that gives you higher performance which really results in more optimized Rewards staking and a large staking institutionals and large staking providers can use DVT to decentralize their infrastructure and mitigate risk associated with large-scale single value setups but also in a way that really reduce their operational costs because now you can run more validators on the same machines stakers who wants to solo stake can leverage DVT to finally get the performance of top-end leading

experience taking providers they can choose those providers to manage their validators instead of running their own infrastructure which is a huge barrier for solo staking right you have to do maintenance and you have to have some technical expertise but also do it in a way that they remain in full custody not only of their validator and principle but also with DVT now with their signing key as well and lastly thousand communities and groups can come together and operate their own validators in a very trust minimized and reduced risk way so now that we learned about DVT let's Circle back to SSV SSV is not a consumer staking application but a distributed

validator infrastructure provider designed for building high performance decentralized and secure staking applications on ethereal the way that we decided to implement DVT in ssvs is a multi-cluster DVT Network we did this out of the notion that a safer ethereum is a multi-cluster ethereum we see in the future there will not be a single a liquid staking provider controlling the market there would be a long tail of new and different staking applications they will use different operators and different variations of cluster and to support this future we develop DVT as a network and we did that by adding two more components first a very robust

peer-to-peer Pub sub networking and we also added a smart contract layer on top why did we do it it's this way or what are the benefits of having DVT as a network well in SSV operators and stakers can join the network permissionlessly at any time using a single smart contract call having smart contracts means there's zero coordination needed in case you want to manage your validator if you want to offboard the network if you want to change your operator set you can do it at any time no coordination needed also networks gives the network participants to enjoy from networked effects so any tool that will be developed for a specific cluster can be

used by any other cluster and by the entire network which really reduce the development costs across the board and networks are transparent meaning that you'll be able to see your operator a performance not only in your cluster but in any cluster past and history which all results in us being able to make better decisions regarding who we choose to manage our operators and the best part is that it's reusable infrastructure you can use the same network the same setups the same operators time and time again and the cost of integrating SSV is practically nothing it's literally a smart contract call and that's pretty amazing because developing infrastructure for staking it's pretty hard it's pretty complex

it's required a lot of expertise and resources and now that SSV make that infrastructure available as a service the themes that will build on us will be able to focus on their application on their business and not the infrastructure beneath but still enjoy a world-class performance and this also means that the next teams will build the next rocket pool it will not take three years it will take three months and we know this firsthand because we already have teams doing exactly that under these time frames so a little bit more more about where we are and where we came from so SSV started about two years ago when we received a grant from the Italian

Foundation to develop an SSV node which was later then termed as DVT hence our name we then turn to form the SSV Dao it's very important for us to be Community Driven to be transparent and to have this controlled by the community and not by just a single entity we on board in more than 40 different contributors around the world to share our passion for staking and decentralization and for the past 18 months we've been running a public test net during which we had participation from over 3000 different operators Out Of Reach 100 and more are verified operators and by that I'm referring to experience and repeatables taking providers some of them are the biggest in the industry were experimenting and

testing with this technology with intention to adopt it in the future they are currently running a test net SSV node which you can try out and pick today we also add participation from over 20 000 validators it was not only important for us to see that this works in scale but also in power if not better than the current performance Benchmark and I'm very happy to say that it does and we've been working and putting a lot of effort on nurturing a very healthy and vibrant ecosystem around our protocol of leading staking providers of strategic partners of different staking application and as you can see behind me there's already more than 25 different teams dedicated to use DVT and SSV as their infrastructure which really shows

that the state of ethereum which I talked about in the beginning of my talk will look a lot more different in the future to come and we will have not a single or a few entities managing the majority of the stake but a lot of them now I want to use this opportunity to reach out to all the devs here and share with your different funding programs we recently launched a 50 million ecosystem fund with the goal to bootstrap teams building dvt-based applications personally I think that with the Shanghai update just around the corner there's never been a better time to capitalize on this and get into staking so if this interests you if you're a serious team if you know how to execute contact with us we would love to partner

with you so where do we go from here as I said this has been two years in the work and right now we are finalizing our V3 test net schedule to go out in April V3 test net is our scaling and security test net and with our audits already scheduled and underway it's pretty safe to say that we're all gonna see DVT on Main at this year and even sooner than you might expect so keep a close eye on our progression and to summarize tying it all together DVT basically enables you to take an ethereum validator and distribute it between between multiple non-trusting parties alongside Technologies like ltus that help scale ethereum or MAV that

help us capture value from it DVT is basically the missing piece that is required to decentralize ethereum based layer and having more resilient infrastructure and implementation like SSV that make that infrastructure reusable in a permissionless way will really paved the way for a long tale of new different staking applications also in a way that will really change the design and benefit existing applications liquid staking pools will have greater performance and bear less risks while offering a greater operator participation staking providers will have a more robust and cost effective decentralized infrastructure and solo stickers will be able to perform with

the performance of world-class providers all in all we put security ethereum security in more hands and make ethereum a more decentralized and secure network for the rest of us if you want to hear more from us I'll be be on a panel this afternoon regarding liquid staking and capital efficiency very interesting come hear us out and if you have any questions me and my team will be outside waiting for you thank you for listening and enjoy your week in Dubai foreign [Applause]