DVT technology assists Ethereum in achieving long-term Decentralization

Ethereum is striving for decentralization by improving scalability. Currently, a modular blockchain approach is gradually replacing the single blockchain method as the mainstream. In this model, the blockchain is divided into three parts: the execution layer, the data layer, and the consensus layer. The execution layer is relatively mature, and research has shifted focus to the data layer and consensus layer.

In September 2022, Ethereum completed its transition from Proof of Work to Proof of Stake. In the following 8 months, the number of validators increased from 400,000 to nearly 600,000. The current focus is on how to make Ethereum staking more decentralized, scalable, simple, secure, and friendlier to independent stakers. In this regard, distributed validator technology (DVT) shows great potential.

Ethereum Staking Ecosystem

Before discussing DVT, it is necessary to understand the current Ethereum staking architecture. This includes key roles such as the Beacon Chain, ETH2 client ( consensus client and execution client ), node operators, validator service providers, and more.

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

How DVT Works

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

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

2. Secret sharing storage: Store key shares across multiple nodes, ensuring integrity is maintained even if some nodes go offline.

3. Coordination between nodes: Use mechanisms such as threshold signatures to ensure secure validation and communication between nodes.

4. Shared Infrastructure: Allows users to flexibly choose different node operators, enhancing client diversity.

5. Non-custodial middleware: such as Charon from the Obol network, ensures that the protocol itself does not hold private keys.

By integrating these technologies, DVT has improved the security, decentralization, and efficiency of the Ethereum validator ecosystem.

Beneficiaries of DV

DVT brings benefits to multiple parties in the staking ecosystem:

• The liquidity staking pool can allocate stakes to multiple operators, reducing the risk of single point of failure.
• Independent stakers can mitigate the impact of network or power outages.
• Institutional staking products can reduce operational and hardware costs.
• Overall reduced risks, which may lower insurance costs.

Value Proposition of DV

DVT brings great value to ETH staking:

• Reduce the possibility of node failures
• Improve key security through multi-node distribution
• Increase client diversity
• Reduce risks and penalties, enhance staker confidence

However, DVT is only part of achieving the decentralization, scalability, and security of ETH. It requires collaboration with other stakeholders to realize this vision.

Combining liquid staking pools can lower the barriers to participation. Requiring node operators to provide collateral can reduce the risk of collusion. Adding secure key storage and redundant node support can further enhance security and reliability.

Future Challenges

The adoption of DVT also faces some challenges:

1. The complexity of the system increases, requiring coordination of multiple nodes.
2. The existing consensus mechanism (, such as BFT ), has limitations when applied on a large scale.
3. May increase transaction delays.
4. The requirements for node redundancy have increased, which may raise operating 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 component of Ethereum staking. As the ecosystem evolves, DVT is expected to meet the changing needs of stakeholders and drive advancements in blockchain technology.