The DVT Extension: Distributed Sequencer Technology (DST)
Promoting Decentralization in Ethereum’s Consensus Layer
Since its inception, Ethereum has been grappling with scalability issues. Every day it faces increasing demand for ‘bandwidth’ that allows applications to run on the network and blockchain transactions to take place.
To address these current limitations, the industry widely employs layer two (L2) solutions until network improvements, like sharding, are implemented. L2s aim to overcome scalability challenges by moving transactions off the main chain, utilizing various techniques such as rollups, state channels, and sidechains to do the work more efficiently.
However, L2 solutions have drawbacks, including centralization, security compromises, and interoperability issues.
Distributed Validator Technology (DVT) L2s like SafeStake, aim to tackle one of the industry’s major concerns: centralization. For Ethereum, centralization is a major concern, as it undermines its resilience and security.
Sequencers: A vital L2 component
Like validators in L1, sequencers are blockchain nodes run by L2 solutions to achieve consensus. They play a key role in L2 solutions that aim to enhance Ethereum’s scalability.
Sequencers are responsible for proposing and building blocks, significantly reducing transaction costs on Ethereum. However, most L2 solutions rely on a single centralized sequencer, making them vulnerable to attacks, downtime, and censorship.
Rollups are an L2 solution with demonstrated success in increasing scalability and reducing transaction costs. Still, more is needed to address centralization in solutions like Arbitrum and Optimism that provide rollups, as they rely on a single sequencer to propose and build blocks.
While it is expected that proposed enhancements involving technologies like sharding will achieve improved scalability for Ethereum on the L1 level, it has yet to be determined how long it will take to fully test and implement these improvements successfully on the mainnet.
Until then, the increasing use of L2 solutions to address scalability issues highlights the need for improved decentralization. The use of a centralized sequencer in solutions like Optimism, for example, with daily volumes exceeding half a million ETH, presents the potential for serious economic consequences.
Extending the use case for DVT to DST
To address the problem of centralization in sequencers, Figment Capital proposed the idea of DST, or Distributed Sequencer Technology, in their research blog.
In simple terms, DST applies the concept of DVT (Distributed Validator Technology) to sequencers instead of validators. The aim is to decentralize sequencers so one sequencer doesn’t hold undue influence over the entire blockchain.
How does DST work?
Instead of a sequencer running on a single operator or machine, DST allows multiple sub-sequencers to share the workload and provide redundancy and fault tolerance. Much like DVT, if one sub-sequencer goes offline or is compromised, the others will continue to operate with DST.
Benefits of DST
In addition to providing greater decentralization and diversity among sequencer operators, DST increases the security and reliability of L2 solutions.
The analogy of Distributed Validator Technology (DVT) can be fully applied to DST, where DVT expands the validator base and achieves greater decentralization.
DVT is a framework that distributes the responsibilities of a validator among different operators or machines, increasing fault tolerance, resilience, and geographical distribution, reducing the potential for validator disruption.
The advantages of distributing operations over multiple resources are clear: fault tolerance, client diversity, and geographic diversity help mitigate the risks of outages and malicious behavior.
This architecture can be replicated in rollups that choose to use DST, promoting decentralization and reducing technical, geographic, and financial barriers, and ensuring that L2s continue to operate even when one or more components fail. With DST, sequencers will always be operational, with the majority available to process transactions, even if some go offline, fail, or become compromised.
Final thoughts
The introduction of Distributed Sequencer Technology (DST), built on the principles of Distributed Validator Technology (DVT), presents a promising avenue for decentralizing Ethereum’s L2 solutions. By addressing the challenges associated with centralized sequencers, DST has the potential to enhance the security, reliability, and fault tolerance of these solutions.
SafeStake’s implementation of DVT provides a practical and compelling example of how to achieve decentralization without compromising the user experience (UX). By effectively distributing validator key shares among multiple independent operators, SafeStake expands Ethereum’s validator base and mitigates the risks associated with relying on a single entity. This same approach can be used by sequencer L2s to enhance the security and resilience of Ethereum’s consensus layer, encouraging broader participation and geographic diversity among sequencer operators.
Given the increasing adoption of L2 solutions, it becomes critical to prioritize and improve decentralization across the Ethereum ecosystem. While Ethereum continues to explore scalability improvements such as sharding, it is important to recognize that the practical implementation and rigorous testing of these enhancements on the mainnet may require significant time. In the meantime, DST offers a valuable and pragmatic solution to address the centralization risks associated with L2 sequencer solutions.
We must continue to conduct extensive research and development of DVT-based technologies, like DST, to expand their application and harness their full benefits across the Ethereum ecosystem. By prioritizing and advocating for decentralization, users can help promote Ethereum’s long-term resilience, security, and diversity.
The ongoing journey towards decentralization in Ethereum’s consensus layer necessitates sustained collaboration, innovation, and the widespread adoption of decentralized technologies, like DVT and DST.
About SafeStake
SafeStake is a pioneering technology company focused on revolutionizing Ethereum staking. With its cutting-edge, decentralized Distributed Validator Technology (DVT), SafeStake provides an ultra-secure, fault-tolerant environment for Ethereum validators, maximizing staking rewards and minimizing penalties. SafeStake is committed to driving the growth and innovation of the Ethereum network while ensuring the security and prosperity of its participants.
