Distributed Validator Technology: Key to Promoting Ethereum Decentralization

As Ethereum is committed to achieving decentralization through scalability, modular blockchain approaches are gaining momentum. In this model, the blockchain is divided into execution, data, and consensus layers. The execution layer has developed technologies such as optimistic and ZK rollups, making it more mature. The current research focus has shifted to the data layer, particularly the application of data availability sampling methods.

The consensus layer is another key factor, including the consensus mechanism and its scalability. Since Ethereum transitioned to proof of stake in September 2022, the number of validators has increased from 400,000 to nearly 600,000. The current focus is on making Ethereum staking more decentralized, simpler, safer, and more friendly to independent stakers. Distributed validator technology ( DVT ) shows great potential in this regard.

Ethereum Staking Ecosystem

In the current Ethereum staking architecture, there are several key roles:

• Beacon Chain: Coordinates the validation process, generates new blocks
• ETH2 clients: including consensus clients and execution clients, responsible for transaction verification and execution
• Node operators: Maintain necessary hardware, software, and network connections
• Validator/Service Provider: Handling the complexities of staking, such as private key management, etc.
• Independent Staker: Individuals who run the necessary software and hardware directly.

This architecture has some issues, such as single point of failure risks and insufficient decentralization. The DVT technology aims to address these problems.

DVT Working Principle

DVT allows validators to run on multiple machines, mainly achieved through the following technologies:

• Distributed Key Generation ( DKG ): Collaborative generation of private keys without any single member accessing the complete key.
• Threshold Signature Scheme: Requires a specified number of validators to collaborate in signing the transaction.
• Byzantine Fault ( Tolerance BFT ) Protocol: Achieving signature consensus among nodes.
• Multi-client implementation: Reduce the risks caused by a single client.

DVT enhances the security, decentralization, and efficiency of the Ethereum validator ecosystem.

Advantages of DVT

DVT brings benefits to multiple parties in the staking ecosystem:

• Liquid staking pools can diversify risk.
• Independent stakers can mitigate the impact of network or power outages.
• Institutional staking products can reduce operational and hardware costs.
• Overall risk has been reduced, which may lower insurance costs.

The Value Proposition of DVT

DVT brings great value to ETH staking:

• Reduce the possibility of node failure
• Enhance key security
• Increase client diversity
• Reduce risks, minimize penalties
• Enhance staker confidence

However, DVT is only a part of achieving the vision of decentralization, scalability, and security for Ether. It needs to be combined with other technologies and methods, such as liquid staking pools, collateral requirements, secure key storage, etc., to maximize its utility.

Future Challenges

Adopting DVT also faces some challenges:

• Increased system complexity
• Scalability limitations of the BFT protocol
• May increase transaction delay
• Increased requirements for node redundancy
• The cost of operating nodes may be relatively high.

Conclusion

DVT represents an important advancement in the staking ecosystem, providing a more secure, flexible, and decentralized infrastructure for staking. It has the potential to change the staking landscape and become a key component of future Ethereum staking. As the ecosystem develops, DVT is expected to meet the evolving demands and drive advancements in blockchain technology.