SSV Network

Introduction

Blockchain technology has always been about innovating and re-imagining the status quo. A little over 10 years after the world first heard about Bitcoin and PoW consensus algorithms, we’re already seeing the next stage in the blockchain revolution – PoS (Proof of Stake). The consensus algorithm that can keep crypto and blockchain the way they were intended – decentralized, secure and accessible to all.

Ethereum is transitioning from a Proof of Work (PoW) to a Proof of Stake (PoS) consensus mechanism; bringing with it the need for ETH stakers to operate and secure the network. Staking on Ethereum is unique compared to other staking blockchains; in order to participate, a staker must run a validator by depositing 32 ETH. If a validator fails to stay online and execute their share of computational responsibilities, their rewards will be deducted from the overall rewards accumulated… Time spent offline is penalized, and misconduct can go as far as getting you removed (slashed) from the network. At this point of time, validators must decide if the complexity of running nodes on a major chain is worth the hassle along with bearing the risk of their investment being slashed down if they don’t stay up persistently.

In order to optimize staking on Ethereum, both validator liveness and security are paramount.

Achieving infrastructure resilience for Ethereum staking however can be exceedingly difficult. The strict protocol rules and decentralization guidelines limit configuration redundancy and prolong the process. As we’re still in the early stages of the industry, there is still a lot of standardization and regulation to do before reaching a stable status quo. The result of which has led to adopted infrastructure similar in design between all stakers, large and small. This in itself limits diversity across components, which can cause disastrous consequences for stakers if one of these components fails, in addition to promoting centralization across various vectors throughout the network.

Centralization may take the form of heavy reliance on a single validator client (as seen during the Prysm mainnet incident), all the way to aggregation of user keys as is the practice of many of the largest staking services. To address these potential single points of failure, research on Secret Shared Validators (SSV) has been in the works since 2019. What started as a research paper conceptualized in collaboration with members of the Ethereum Foundation, later labeled DVT (Distributed Validator Technology) is now a fully functional open source decentralized ETH staking incentivized testnet.

At its core, DVT (aka SSV) enables the distributed operation of an Ethereum validator across varying operators. ssv.network is an infrastructure layer designed to promote decentralization, diversity, fault tolerance and resilience to the ETH staking space.

SSV Technology Overview

SSV (also referred to as ‘DVT’, Distributed-Validator-Technology) is the first secure and scalable implementation for validator key sharing between non-trusting nodes (i.e Operators). ssv.network enables validators to run portions (KeyShares) of a validator key across a distributed, trustless network, mitigating potential modes of validator failures. No node on the network needs to trust the other(s) to operate, and a certain number of faulty nodes (up to the threshold) can be tolerated without affecting validator performance. In addition, no node can recreate a validator key signature on its own or make unilateral decisions; paving the way for trustless networks distributed across multiple people or staking services.

SSV Network running a validator key on 4 different setups. Only 3 of 4 KeyShares are needed to produce a beacon chain signature, and no single KeyShare can take unilateral control of the validator.

SSV uses a secure multi-party computation (MPC) threshold scheme with a consensus layer on top, that governs the network. Its core strength is in its robustness and fault tolerance; by trustlessly splitting a validator key across different systems, SSV presents an Ethereum staking infrastructure solution that reduces the reliance on any single point of failure that might affect validator performance and safety, while simultaneously increasing network security by focusing on decentralization across the entire Ethereum protocol.

More about SSV →

SSV.network – Distributed Staking Network

SSV promotes decentralization, security, and liveness across the Ethereum consensus layer. The active-active redundancy configuration forms the foundation of ssv.network – a fully decentralized and robust ETH staking network. Using the network will be open and simple for anyone who wants to run an Ethereum validator; from DIY users all the way to staking pools and big institutional staking services. This applies to using the network both as a user or a service provider; regardless of staking configuration. As long as duties are properly executed, anyone is eligible to provide service and reap the rewards for doing so.

Different services can be built on top of SSV.network by using it as staking infrastructure. Because the protocol is open-source, anyone can expand and develop on top of it Imagine a staking pool whose operators leverage SSV – enabling the true decentralization of pools from both the operational perspective as well as the withdrawal perspective, which has been the limiting factor for decentralized staking pools to date.

This type of horizontal scaling is also complemented by vertical scaling, individual stakers choosing multiple SSV operators to run validators. Thereby protecting their validator from staking risks and promoting decentralization across the network.

Participants

The network is comprised of 3 main actors:

  • Operators – Infrastructure providers that will manage KeyShares of validators on behalf of users (stakers) and collect fees for their service.
  • Stakers – Services or individual ETH holders that wish to leverage SSV for the liveness and security of their validator.
  • DAO – The governance and driving force of ssv.network decisions. Tasked with rewards distribution, funding initiatives, partner programs, validator and operator guidlines, future development are executed.

SSV operators, ranging from large centralized exchanges, to highly technical at-home validators, will have the chance to join the network, earn network rewards, and facilitate staking for users. All with the crucial added benefit of enhanced resilience for both staker and operator.

If an operator must go offline or is compromised, the validators they support will continue running without pause. Given the threshold of KeyShares needed to reach consensus amongst operators, not all need be online at once.

Making things more interesting, an SSV operator can offer a variety of different nodes boasting a range of different components. The end result is enhanced decentralization of components and the reduction of single points of failure across the entire network.

SSV DAO

DAOs are the epitome of decentralization and transparency as they exist to promote decentralized governance and shield against consolidation in the hands of a selected few. The SSV DAO is a natural extension of the decentralized and open-source protocol.

The SSV DAO is being created for the sole purpose of decentralizing ownership of ssv.network. The SSV DAO is the Network’s official governing entity. Community members can propose and vote for new initiatives, protocol changes, fees, and treasury related decisions. In order for the protocol to remain agnostic, decision making will be assigned to token holders who have the ecosystem’s best interests at heart.

SSV DAO is a for profit DAO. SSV is the token used for governing the ssv.network protocol and treasury. The SSV token will comprise the majority of the DAO’s treasury. And will be used to execute and enforce the decisions being made.

In order for the DAO to maximize income, community members mostly contribute to:

  • Protocol development and decisions.
  • Determining protocol fees.
  • Supervising operator activity.
  • Assisting with growing the ecosystem.

Conclusion

ssv.network will be open to anyone who wishes to run a distributed validator, safeguard and optimize the performance of that validator while promoting decentralization across the network. The underrepresentation of non-custodial staking services on the Beacon Chain mixed with a historical lack of validator client diversity makes clear the need for such a system. The Ethereum consensus layer is not immune to central forces, and the SSV.network intends to change that by making decentralization of staking accessible to all.