Distributed Validator Technology Supports Long-Term Decentralization Development of Ethereum

As Ethereum continues to pursue decentralization through scalability, modular blockchain approaches are gaining increasing attention. In this model, the blockchain is divided into three main parts: execution layer, data layer, and consensus layer. The execution layer has made significant progress, with various rollup solutions being widely adopted. The current research focus has shifted to the data layer, where innovative methods such as data availability sampling are driving the development of this field.

The consensus layer, as a key component of blockchain, includes the consensus mechanism and its scalability. Ethereum completed its transition to a proof-of-stake network in September 2022. In the past 8 months, the number of validators has grown from 400,000 to nearly 600,000. The current focus is on making Ethereum staking more decentralized, scalable, simple, and secure, while also being more friendly to individual stakers. The distributed validator technology (DVT) shows great potential in this regard. This article will delve into DVT and explore how it contributes to Ethereum's decentralization roadmap.

Overview of the Ethereum Staking Ecosystem

Before diving into DVT, we need to understand the overall architecture of current Ethereum staking. This includes the following key roles:

1. Beacon Chain: Coordinates the validation process and generates new blocks.

2. ETH2 Client: includes the consensus client responsible for transaction validation and the execution client that executes smart contracts.

3. Node operators: Maintain the infrastructure required for network participation.

4. Validator service providers: Provide users with convenient staking services, such as centralized exchanges or staking pools.

5. Independent Staker: Individuals who run the necessary software and hardware directly.

The current architecture has a single point of failure risk and insufficient decentralization. Issues such as a lack of client diversity and improper private key management may lead to financial losses. This is where DVT can play an important role.

DVT Working Principle

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

1. Distributed Key Generation ( DKG ): Participants collaborate to generate a private key without any single member holding the complete key.

2. Key Sharding Storage: Private key shards are distributed across multiple nodes, enhancing security.

3. Coordination mechanism: Ensure secure verification and communication between nodes, commonly used threshold signature schemes.

4. Consensus Protocol: For example, the SSV network adopts Byzantine Fault Tolerance (BFT) protocol.

5. Flexible Node Selection: Users can choose different node operators based on factors such as geographic location and data centers.

6. Multiple client implementation: Reducing the risk of network interruption caused by a single client.

Some DVT solutions, such as the Obol network, also adopt a non-custodial middleware design, further enhancing security.

Beneficiaries of DVT

DVT brings benefits to multiple parties in the staking ecosystem:

1. Liquidity Staking Pool: Allows the distribution of staking across multiple operators, reducing the risk of single point of failure.

2. Independent Stakers: Mitigate the impact of network or power outages.

3. Institutional Staking Products: Reduce operational and hardware costs, potentially lowering insurance expenses.

Value Proposition of DVT

DVT brings multiple values to ETH staking:

1. Reduce the likelihood of node failures
2. Improve key security
3. Increase client diversity
4. Reduce inactivity penalties
5. Enhance Staker Confidence

However, DVT is just one component in realizing the vision of decentralization, scalability, and security of Ethereum. It needs to develop in coordination with other technologies and participants:

• Combining liquidity staking pools can lower the participation threshold.
• Requiring node operators to provide collateral can reduce collusion risks.
• Adding secure key storage and redundant nodes can further enhance security.

Future Challenges

The application of DVT also faces some challenges:

1. Increase system complexity, requiring multi-node coordination.

2. Consensus mechanisms like BFT have limited scalability in large-scale networks.

3. May increase transaction processing delays.

4. The redundancy requirements for nodes have increased, raising operational costs.

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 technology for Ethereum's future staking. As the ecosystem continues to evolve, DVT will continue to meet the needs of all parties and drive advancements in blockchain technology. The development of this technology is highly anticipated and is believed to create more opportunities for the broader blockchain community.