DVT operates as a security system for staking validators. It spreads key management and signs tasks across multiple parties.
There are many benefits of DVT, including resilience, decentralization, and security.
Mitigating Single Points of Failure: DVT amplifies validator resilience to reduce single points of failure, specifically when operators go offline for an unexpected reason. This is done by active redundancy. Essentially, if some nodes go offline, the remaining machines in each cluster can still handle the necessary tasks, reducing the chances of network failures and strengthening the validator set.
Enhances Decentralization: DVT actively improves decentralization across client diversity, geographical location, and infrastructure.
Improved Security: Through the use of Distributed Key Generation (DKG), a process that allows multiple entities to cooperatively create a mutual key without any single entity gaining complete knowledge of that key, and the deployment of DVT, node operators are able to enhance the overall security the network by adding an extra layer of protection. This will ultimately ensure protection from malicious attacks as well as prevent unauthorized access to the network.
As with all decentralized technologies, users should remain vigilant and attentive to any challenges or risks that may arise.
Despite being an emerging technology for validators, setting up and managing a distributed validator system is currently a complex process, requiring the coordination of stakeholders and the implementation of governance mechanisms. This increases the barrier to entry for solo stakers and community stakers. Additionally, implementing DVT may lead to higher expenses and network delays in severe cases due to the division of nodes.
When looking at the use cases of DVT, the framework offers a wide range of applications beyond blockchain validation.
Its role in bolstering security enhances the reliability of decentralized staking protocols, fostering further alignment with the values of the Ethereum network.
Additionally, it facilitates communication among blockchain networks, creating opportunities for asset transfer and liquidity provision across different platforms. DVT also improves governance mechanisms by promoting fairness in decision-making.
DVT represents an innovation with a strong outlook for the DeFi ecosystem. Blockchain networks can achieve new levels of security, and decentralization, laying the foundation for a more suitable financial infrastructure.
Author:
Lido DAO Contributors, who are currently working on a proposed use case of distributed validator technology, known as Simple DVT, within the Lido protocol. This module is designed to make validator utilization more accessible to a wider audience, by leveraging the Curated Operator Module’s established design as well as the DVT solutions of leading providers Obol Network and SSV Network.
*Applications of DVT
Developed by Lido DAO, the proposed Simple DVT module is a modification of the practical use of DVT in real-world scenarios. The module aims to broaden the Lido Node Operator set on Ethereum. It shows the potential for scalable and permissionless DVT solutions in the future. Simple DVT allows solo stakers, community stakers, existing Lido node operators, and other staking platforms to participate.
Join the thousands already learning crypto!