While the Ethereum network’s migration to a proof of stake (PoS) consensus mechanism has made the protocol less energy intensive, Alon Muroch, the founder of the SSV Network core team, said that if the number of validators does not is kept under control, this can lead to network overload.
The promise of distributed validator technology
Muroch said many stakeholders, including Ethereum co-founder Vitalik Buterin, are already working on potential solutions that could prevent the network from becoming overloaded. As Staking Rewards data has shown, the Ethereum network is on track to achieve 100% ether deployment by December 2024. If this happens, the network risks running out of ETH for transaction purposes, according to the network’s founder. The core team of SSV Network argued.
While the idea of limiting the number of validators is seen as a more practical solution, Muroch said he believes Distributed Validator Technology (DVT) is the ideal solution to the problem. He argued that DVT not only helps eliminate single points of bankruptcy, but also increases client diversity and overall reduces systemic risk.
In his written responses to Bitcoin.com News, Muroch urged the staking community to make DVT the “gold standard” for staking infrastructure.” When widely adopted, DVT will not only help reduce systemic risk on Ethereum, but also enable more robust staking services. Below you will find Muroch’s answers to all questions sent.
Bitcoin.com News (BCN): According to Staking Rewards, there are more than 894,000 validators on the Ethereum network, and this number is expected to rise soon. Even though it helps with decentralization, do you think the sheer number of validator nodes puts a lot of strain on the network?
Alon Muroch (AM): The growing number of validators on the Ethereum network is a concern that is actively discussed among core developers/communities and projects such as SSV Network. In a recent discussion thread, Vitalik [Buterin] has addressed a number of ways to overcome this problem, one of the solutions is to use DVT.
DVT can make it possible to ‘group’ many validators under one cluster in a distributed manner, reducing the load on the beacon chain.
BCN: Validator weaknesses, especially key governance and downtime risks, are not fully understood by the ETH community. Can you give us a few details of what you’re sharing with our readers?
BEN: Running validators at scale is a complicated task, especially in a competitive market like Ethereum. In recent weeks, several compromised operators and client developers have affected Ethereum’s performance, which could have been avoided with a fault-tolerant protocol like DVT.
BCN: What is Distributed Validator Technology and how does it work?
BEN: Distributed-Validator-Tech (DVT) is a protocol that enables the distributed operation of an Ethereum validator between independent operators. SSV has built a complete DVT network that allows anyone to run a distributed validator in seconds and allows developers to build entire applications.
DVT was initially designed by the Ethereum Foundation as a way to distribute ether and make it more robust. It helps eliminate single points of failure, increase customer diversity and reduce systemic risks.
DVT uses a consensus protocol and threshold signatures as core components (in addition to P2P publish/subscribe networks). No operator within a DVT cluster can compromise the validator.
BCN: With the growing number of Ethereum validators growing, how does SSV Network’s ETH staking infrastructure enable seamless use of DVT at scale?
BEN: DVT on a large scale is a tough challenge that we have been working on for three years. It requires a lot of design work, optimization and developer tools. SSV is built as a network so that any tool/optimization/research can be easily distributed to the entire network.
SSV has just launched on a completely permissionless mainnet and is already managing an ETH stake of 70,000 with better performance than the benchmark. We expect the DVT market share to be 10-20x what it is today.
BCN: Like other protocols, your network claims to be an open-source, decentralized, and permissionless network. While a decentralized platform is always better for Web3, be also aware that many of the decentralized projects have an element of centralization at their core. How do you assure developers and stakeholders that SSV Network is what you say it is?
BEN: From the beginning, SSV has set the independence of its DAO as a goal. This means that the DAO has an independent ability to monitor and advance the protocol. Regardless of a specific team/person.
To this end, grants are awarded to various teams to develop various components of the protocol. The DAO manages the protocol contracts and any updates thereto. All that means is that token holders vote to decide what SSV will look like in the future.
BCN: Given the benefits of DVT, what initiatives do you think the staking industry should take or encourage to make DVT as accessible and user-friendly as possible for developers?
BEN: I believe the staking community should adopt DVT as the gold standard for staking infrastructure and ensure we move from a single point of fail setup (the current tech stack most commonly used) to a distributed validator-future going.
It will reduce systemic risk on Ethereum and provide better and more robust staking services. DVT is intended to define what L2s are for transaction processing, a decentralized alternative that is superior.
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