Distributed Validator Technology Supports Ethereum's Long-term Decentralization

Ethereum is achieving decentralization through scalability, and a modular blockchain approach is gradually gaining momentum. In this model, the blockchain is divided into the execution layer, data layer, and consensus layer. The execution layer has matured through multiple iterations, and the focus of research has shifted to the data layer and consensus layer.

In September 2022, Ethereum completed its transition from proof of work to proof of stake. Over the past 8 months, the number of validators has increased from 400,000 to 598,000. The current focus is on making Ethereum staking more decentralized, scalable, simple, and secure, and more friendly to independent stakers. The distributed validator technology (DVT) has tremendous potential in this regard.

Ethereum Staking Ecosystem

The Ethereum staking ecosystem includes several key participants:

• Beacon Chain: Coordinates the validation process and generates new blocks.
• ETH2 Clients: including consensus client and execution client
• Node operators: responsible for running the necessary infrastructure
• Validator/Service Provider: Such as exchanges or staking pools, providing convenient staking services.
• Independent Staker: Directly run software and hardware for staking

The current architecture has a risk of single point of failure and lacks sufficient decentralization. DVT technology is expected to solve these problems.

DVT Working Principle

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

• Distributed Key Generation: Collaboratively generate private keys without any single member accessing the complete key.
• Publicly verifiable secret sharing/verifiable secret sharing: ensuring the correctness of key generation
• Threshold signature scheme: A specified number of validators must cooperate to sign the transaction.
• Byzantine Fault Tolerance Protocol: Achieving signature consensus among nodes

DVT still needs to address the issue of shared infrastructure among nodes. Some projects allow users to flexibly allocate key shards based on factors such as geographic location and data centers, emphasizing the importance of client diversity.

Beneficiaries of DVT

DVT almost benefits all participants in the staking ecosystem:

• The liquidity staking pool can distribute validator allocation, reducing single point of failure risk.
• Independent stakers can mitigate the impact of network or power outages.
• Institutional staking products can reduce operational and hardware costs.
• Validators can safely increase the number of keys for each node.

Value Proposition of DVT

DVT brings tremendous value to ETH staking:

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

However, DVT is only part of the vision for achieving Ethereum's decentralization, scalability, and security. It needs to work together with other technologies and participants.

• Combine liquidity staking pools to lower the entry threshold
• Require node operators to provide collateral to reduce collusion risk
• Add secure key storage and redundant nodes to further enhance security

Future Challenges

DVT also faces some challenges:

• Multi-node coordination increases system complexity
• Scalability limitations of the BFT protocol in large-scale networks
• May increase transaction processing delays
• Increased redundancy requirements for nodes, raising operational costs.

Conclusion

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