SSV Network, formerly known as Bloxstaking, was launched in 2017. Its core business is to provide a crypto asset management platform for the B-side. In 2021, the project transformed and completed its brand upgrade, and is committed to creating a decentralized open ETH staking network for any individual or service provider who wants to run an Ethereum node. The network implements secure and decentralized management of Ethereum verification node keys through a validator protocol based on privacy sharing. Currently, node operators and staking service providers such as Lido, EverStake, and Stakely have announced their participation in the ecosystem.
The project received the Ethereum Foundation Grant funding plan in Q1 2021, launched the test network in Q2 2021, launched the incentivized test network in January 2022, and will launch the main network in 2022.
The problem the project wants to solve
Background: ETH2.0, developed under the leadership of Buterin, will be launched in the second half of 2022. The latest news is that the beacon chain will be introduced on September 19, and the consensus mechanism will shift from POW to POS. The two most important changes in ETH2.0 are:
Introducing the beacon chain: From the current POW to POS, POS does not need to waste computing power on finding random numbers, and its performance is more than 15 times higher than that of POW.
Introducing sharding technology: ETH2.0 will have 64 shards, equivalent to 64 chains. ETH chain TPS will increase 64 times. After ETH2 is fully operational, TPS is expected to be more than 1,000 times faster than the current ETH1. This is only the speed increase on the first-layer chain, excluding the expansion of the second-layer rollup.
One of the important events in Ethereum's shift from POW to POS is the launch of the Beacon Chain. The beacon chain introduces POS into the Ethereum network and cannot handle smart contracts. Its main role is to coordinate the stakers of Ethereum. In addition, when the Ethereum mainnet and the beacon chain are merged, the shard chain upgrade will be introduced to lay the foundation. On the Beacon Chain, users can stake 32 Ethereum to protect the network and receive rewards.
Current staking method
ETH2.0 official pledge: Requirements: Prepare 32 ETH, currently worth $120,000. You also need to purchase and configure cloud servers yourself, install and operate ETH1 nodes and ETH2 nodes yourself, and maintain long-term uninterrupted online work. If you are offline, you will be fined.
Problem: The cost is high, operation and maintenance requirements are high, and ordinary users cannot get started.
Exchange pledge and pledge service provider (Lido, RPL, etc.)
Solution: Many exchanges and project parties provide solutions similar to Yu'e Bao. Users can deposit any amount and then pledge them uniformly to obtain income. There are also many operators that provide custody services, but according to the rules of ETH2, if operators cannot provide stable performance, they will be punished and the deposited ETH will be deducted.
Problem: The withdrawal private keys of all nodes are officially backed up by LIDO, and the outsourced nodes give the signature verification private keys to the node operation and maintenance operators, which introduces security issues.
SSV solution
SSV splits the signature private key into 4 (or N) pieces, and each shard private key is given to a node operator (the service provider that operates and maintains the node). All node operators do not have complete signature private keys and have become pure workers, helping stakers operate and maintain nodes to earn wages without having node control rights. The pledger controls the withdrawal private key and signature private key. Withdrawals are always saved offline, and using SSV to manage the signature private key can also be saved offline for greater security. The pledger holds the signature private key without giving it to the operator, and always maintains control of the pledge and ownership of the node.
Benefits to all parties: Mortgage: After paying 32 ETH, you have full control of the withdrawal private key and signature private key, and they can be saved offline. Let 4 operators operate and maintain the node. No one operator can do evil and be fined the 32 ETH mortgaged.
ETH2 public chain: The upgrade and maintenance of ETH2 nodes is simpler. One operator's node upgrade can be stopped at any time without affecting the other three operators' continued work. The upgrade can be completed after 4 turns. This will help ETH2.0 become more decentralized and resist the risk of single-point downtime.
ETH2 pledge platform: These platforms pledge a large amount of ETH. Although the ETH belongs to each user, the two private keys of the node are managed by the platform. At most, they operate and maintain a small number of nodes themselves, and most of the nodes will be outsourced to service providers who specialize in operating and maintaining ETH2 nodes. If there is a solution like SSV, they will most likely choose SSV.
Node operator: Operation and maintenance personnel can easily and conveniently upgrade and maintain nodes through SSV. The node's ability to resist risks has been greatly improved, such as the risk of exposing the complete private key, the risk of the node server going offline, the risk of being attacked by hackers, and the risk of node upgrades and maintenance going offline.
Team situation:Lead, Alon, is an Israeli. He served as the founder of the social APP Tzofe for more than a year, and later served as the Vice President of Research and Development at Pixtr for a year, and then as Bitcoin.
Conclusion
SSV Network effectively solves the security and operation and maintenance issues in the ETH2.0 staking process through innovative decentralized solutions, providing users with a more efficient and safe staking method. With the advancement of ETH2.0, SSV Network is expected to become an important player in the field of ETH staking and contribute to the healthy development of the Ethereum ecosystem.