SSV.Network, the Ethereum infrastructure provider developing Distributed Validator Technology (DVT) has hit major milestones within weeks of launch. More than $100M in ETH has been staked into its protocol and its network now comprises 2000 validators. The benchmarks were hit just two months after the protocol’s launch.
SSV’s implementation of DVT is designed to strengthen validators and increase decentralization. It achieves this by splitting the private key for a validator between different entities. This provides redundancy and minimizes the likelihood of a validator going offline. DVT also encourages infrastructure providers to utilize a wider validator set, reducing reliance on a handful of dominant node operators.
Nine Figures in Two Months
Since launching on September 15, SSV.Network has quickly gained traction. Demand for its fortified staking solution has resulted in 2000 validators running the SSV client and $100M in ETH being staked. The 50,000+ ETH currently staked with SSV is provided by multiple LPs, each of whom benefits from the network’s DVT implementation.
As SSV.Network grows, the number of ways to interact with its protocol will expand. The goal is for third parties to develop staking applications that tap into SSV’s infrastructure and distributed validator set. The project’s governance forum lists various grant proposals seeking to build on SSV.Network. On October 31, a $7,000 grant was approved for dForce to create one of the first SSV integrations.
Liquid Staking Keeps on Trucking
The liquid staking sector continues to grow month on month, with more money pouring into securing PoS networks. The bulk of this stake is directed towards Ethereum, whose liquid staking TVL is now approaching $25B. Growth in liquid staking has been aided by the paucity of opportunities to earn sustainable yield elsewhere in DeFi coupled with the relative security compared to yield farming.
Because staking protocols such as SSV.Network interact with the base layer, and control validators that can be penalized for suboptimal performance, it’s critical that code introduced at this level is meticulously audited and battle-tested. Numerous Ethereum infrastructure providers are in the process of implementing DVT, with SSV’s version proving a popular choice.
The Case for DVT
SSV’s implementation of DVT allows control for a single Ethereum validator to be split between 4 and 13 nodes. From a decentralization perspective, this is a major improvement. As its team explains, “The bonus of creating a reusable public good is that there is a network effect. Applications and tooling developed by builders can be used by the rest of the network as well. The network effect of ssv.network stems from its ability to support a diverse range of stakeholders in the Ethereum staking ecosystem.”
The next phase in SSV’s evolution will be the deployment of third party applications that will support everyone from solo stakers to professional node operators. The SSV protocol’s open source design and permissionless nature means that anyone can utilize it.
As the Ethereum staking ecosystem matures, DVT is expected to be introduced by most liquid staking protocols, which can flaunt their decentralization credentials while bolstering network security. This will make it harder for rogue actors to gain control of compromised validators and will allow more node operators to share in network rewards.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
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