Understanding SSV: The Key Secret to Securing the Future of Ethereum
Author Rui, blockchain gal, web3 founder.
Twitter: @popolandRuii
If you’re not a tech whiz, you might be wondering what all the buzz around SSV is about. Well, I’m here try my best to break it down from non-tech perspective. Please feel free to reach out and comment!
- ❓What is the problem with PoS?
- 🧩 The first puzzle piece: What is SSV?
- 🤖️ How does SSV work?
- ✨ What is the value of SSV in my view?
First, let’s talk about Ethereum. It’s a decentralized blockchain platform that relies on a network of validators to confirm transactions and keep things running smoothly.
Previously, these miners were chosen through a proof-of-work mechanism(PoW), but Ethereum is in process of transitioning to a proof-of-stake system(PoS). This means that validators need to stake 32 ETH and run a dedicated node on Ethereum and Beacon Chain.
Not familiar with PoS? Check my previous research: https://medium.com/@poporuii/the-art-of-ethereum-2-0-serenity-of-eth-8a91f0fa851c
❓What is the problem with PoS?
Being a validator is not an easy task. You need to maintain “Liveness” to be available almost 24/7 and “Security” to avoid being compromised. If you fail to do so, you risk getting slashed.
Many staking services have recently emerged to release stakers from the pressure of hardware (Staking-as-a-Service) and money (Pooled Staking) requirements. However, this convenience comes with risks. The centralized management of huge amounts of validators by staking services increases the risk of group failure, which endangers the entire Ethereum blockchain.
Therefore, the main questions are:
- How can we keep validators online and available?
- How can we avoid the risk of a single validator failure?
🧩 The first puzzle piece: What is SSV?
If you are using a pooled staking application like Lido, SSV is the underlying technology that supports it. SSV (Secret Shared Validators), or Distributed Validator Technology (DVT), aims to enhance the decentralization of Ethereum and increase the diversity of validators.
Instead of allowing a single operator to act as a validator, SSV is a decentralized solution that divides a validator’s key into multiple keyshares. This acts as a middle layer between the Beacon Chain and the validator client.
The keyshares operate the validator, meaning that if one operator goes offline, the others can take over the responsibility. Additionally, since the private key can be generated and stored offline, stakers remain in control, and hackers are unlikely to steal it.
Some highlights:
- 🤖️ If a single operator goes offline, is compromised, or unavailable, the remaining keyshares will respond and there will not be a pause in the SSV network.
- 🔒 The SSV network uses a non-trusting mechanism where operators do not know each other. This makes it difficult for hackers to attack the network because they won’t know which four keyshares are required to combine into one node.
- 🔑 The validator private key can be generated and stored offline while keyshares operate the validator. This allows stakers to maintain control of the private key and makes it unlikely for hackers to steal it.
🤖️ How does SSV work?
To split a private key:
We use a cryptographic process called SSV that generates a shared public and private key set. Each operator gets a portion of the private key so that no single operator can have access to the entire private key or make malicious decisions.
To integrate the keyshare:
SSV integrate the keyshare using BLS signatures, which allows multiple signatures to be combined to recreate a validator key signature. The mechanism used to reconstruct a validator key is called Shamir Secret Sharing.
To distribute the keyshares to operators:
SSV use the secure and well-known Multi-party Computation (MPC) method. This allows operators to perform validator duties without reconstructing the validator key.
To connect everything together:
They use the Istanbul Byzantine Fault Tolerance Consensus algorithm. This algorithm randomly selects a validator node (KeyShare) who is responsible for proposing a block and sharing information with other nodes. This makes sure that the system remains secure and trustworthy.
✨ What is the value of SSV in my view?
Maintaining Network Stability:
Being a 24/7 available and well-performing validator is not an easy task, even for experts. By using SSV technology, responsibility is split among four different operators. It won’t matter if one operator goes offline or is compromised, as long as enough operators exist on the network, it will continue running without interruption.
Increasing Security through Decentralization:
Pooled staking integrates validators as service providers and increases the risk of group failure. However, by using SSV technology, stakers are free to choose independent operators and validators can run on multiple clients. This eliminates the risk of a single point of failure and helps the entire Ethereum network become more stable.
Empowering the Ecosystem:
One of my friends asked me why SSV didn’t develop an application for pooled staking themselves. In my opinion, the competition for dApps is ongoing, and users have no loyalty to a particular application. Whenever a new DApp offers a higher APR, users will abandon the current one and switch to the new one. Therefore, being a solid underlying protocol is a smart choice that empowers the entire ETH ecosystem and allows SSV to fulfill its role.
Shout-out to Matt, Eran and Marko! Your explanations and teaching work are amazing. Such a responsible, powerful, and passionate team!
Thanks for reading this, I’d love to receive feedback and learn more from you!
About Rui: https://www.popolandruii.com/
