What is DVT? and Lido Simple DVT?
On October 26, 2023, the Lido DAO community agreed to introduce a DVT technology with Simple Distributed Validator Technology (DVT) into their Protocol. This move has the potential to make Ethereum more secure and decentralized.
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What is Distributed Validator Technology (DVT)?
Imagine you and four friends decide to keep a treasure safe. Instead of trusting one person to hold onto the key, each person holds a piece of it. To open the treasure chest, a majority of the group must come together. This is somewhat how DVT works.In the Ethereum network, validators are like the guardians of treasure (in this case, digital assets and transactions). DVT allows not just one, but multiple operators (our friends in the analogy) to manage a validator. This means if one operator has a problem, the others can keep things running smoothly, making the whole system more resilient and secure.
Why Simple DVT?
The key word here is “simple.” The goal is to make this advanced technology accessible to more people. By using DVT, the Lido platform aims to spread out the responsibility of validating transactions over a broader set of operators. This not only makes the process more secure by reducing the risk of failure but also makes the system more democratic and less centralized. Simple DVT is particularly exciting because it’s a step towards using this technology on a larger scale in the Ethereum.
How Does It Work?
Simple DVT operates by bringing together different node operators, who are responsible for validating transactions and creating new blocks in the blockchain. It’s like forming a team where each member plays a part in ensuring the network runs smoothly. This team uses technology provided by two major players in the space, Obol Network and SSV Network, to coordinate their efforts.
What’s in It for Node Operators and Stakers?
For those who help secure the network (node operators) and those who invest their Ethereum (stakers), Simple DVT offers several benefits. It opens up opportunities for more people to become node operators, even if they are working alone or part of a small community. This inclusivity enhances the security, decentralization and reliability of Ethereum by diversifying who is participating in the validation process.The introduction of Simple DVT is being approached with caution. Initially, only a small percentage of the Lido platform’s stakes will be managed using this technology. This trial phase allows the DAO and node operators to monitor how well the system works and make adjustments as needed.
To make sure this new system is attractive to node operators, the proposal includes a financial incentive structure. Operators and technology providers are compensated through fees, which are a small percentage of the rewards earned from validating transactions. This ensures that those contributing to the Ethereum’s security and decentralization are rewarded for their efforts.
Looking Ahead
Simple DVT is seen as a stepping stone toward more advanced and decentralized validation methods in the future. While it’s starting small, the goal is for this technology to eventually allow anyone to become a validator, making the Ethereum network more secure, resilient, and open to all.
At DragonStake, we have been actively participating since the beginning of Distributed Validator Technology (DVT), including in the initial batch of validators for DVT with SSV. Currently, we are involved in a cluster for the Obol x Lido Simple DVT, alongside heavyweights like Deutsche Telekom and P2P.org, as part of the first Obol x Lido Simple DVT operator clusters. This cluster successfully went live on the Ethereum mainnet on April 6th, 2024. Furthermore, DragonStake is contributing to the ongoing testnet phase of the SSV x Lido Simple DVT. As the only staking provider registered in Spain, this marks a significant step forward. We will continue working and assisting in the development of more decentralized networks.
The introduction of Simple DVT by the Lido DAO represents a promising step towards making Ethereum more secure, decentralized, and inclusive. By spreading out the responsibility of validating transactions, the network becomes more resistant to failures and attacks, ensuring its integrity and the safety of users’ assets. As this technology evolves, it will open up new possibilities for participation in the Ethereum ecosystem, democratizing access to blockchain technology and empowering users around the world.
Disclaimer: This article is provided for informational purposes only. Cryptocurrency investments are subject to high market risk. DragonStake is not responsible for any direct, indirect, or consequential losses as a result of the staking process. Always perform your due diligence before making financial decisions.
