The ssv.network (SSV) developers hope to cash in on Ethereum’s shift from Proof-of-Work (PoW) to Proof-of-Stake (PoS) architecture.
To explain, they built the Secret Shared Validator (SSV) technology for distributed staking. They call ssv a “distributed validator infrastructure for developers.” Hence, the SSV technology helps develop build staking into Ethereum applications.
Staking is the act of depositing 32 Ethereum (ETH) tokens to activate validator software. Validators store data, process transactions, and add new blocks to the Ethereum blockchain. Ethereum pays validators rewards for properly batching transactions and checking the validators.
SSV Ethereum Staking and Validators
The ssv.network (SSV) splits validator keys for Ethereum staking between nodes. SSV encrypts, splits, and distributes validator keys between. This allows operators to make transactions between nodes without trusting other node operators.
Ethereum secures assets with public-private key cryptography. To explain, a validator key is a code that opens the cryptography. Hence, users need validator keys to access Ethereum.
There are three kinds of Ethereum validator keys: a public key and a private key. The public validator key is the basis of an Ethereum address. Hence, anybody can get the public key and use it to access Ethereum. The private validator key is used to sign transactions and data and identify Ethereum users.
When Ethereum switched from Proof-of-Work (PoW) to Proof-of-Stake (PoS) architecture, they added a third kind validator key. The new key allows users to stake Ethereum and run validators. I think this is the validator key the ssv.network creates.
This is also called the withdrawal key, which allows people to withdraw assets or data from Ethereum. Hence, Ethereum stakers need a withdrawal key to get their rewards.
Ssv.network validators
The Ethereum (ETH) staking ecosystem requires users to run dedicated software validator client and deposit 32 ETH.
The ssv.network performs this technologically complex process and makes it access to more people. Validators make money by earning small Ethereum (ETH) rewards each time it signs data correctly.
Secret Shared Validators (SSV), or Distributed Validator Technology (DVT), is a protocol that encrypts valdiator keys and splits them into four KeyShares. SSV distributes the KeyShares to four non-trusting nodes run by operators. They claim this adds fault tolerant active redundancy to Ethereum staking.
Securing Ethereum with Validators
They claim SSV can mitigate risks and reduce failures by building a decentralized network of individual nodes. SSV claims this network will outperform individual staking services. They claim SSV can build such a network because node operators do not have to trust each other.
SSV itself serves a middle layer between a Beacon Chain node and a validator client. To explain, the Beacon Chain was Ethereum’s first proof-stake chain. They merged the Beacon Chain with Ethereum’s original PoW chain in September 2022. The Beacon Chain introduced the consensus logic and the block protocol that secures Ethereum. Hence, SSV connects the validators to the Beacon Chain.
The SSV network itself has two layers. These layers are an SSV Peer-to-Peer (P2P) network layer and an Ethereum contract layer that provides network governance. The P2P layer executes by assigning KeyShares and tasks to validators and operators.
Ssv.network Governance
The contract layer governs the ssv.network by assessing and ranking operators for quality. Ssv.network creates validators and operators and distributes fees on the contract layer.
The ssv.network (SSV) ecentralized autonomous organization (DAO) rates operators and assigns to score to them. DAO members can vote to remove operators who violate policy or have low scores from the network.
A network fee finances the DAO. The DAO collects the network fees. This DAO maintains a treasury that distributes funds to support community initiatives. The DAO makes protocol decisions.
The DAO ranks validators by liveness (uptime) and security. If validators are not online and secure, the DAO can remove them from the network.
Ssv.network attributes
The ssv.network (SSV) provides consensus duty based duty validation with non-trusting nodes.
They claim the ssv.network increases fault-tolerance by replacing single validators with multi-node clusters. There is a scalable infrastructure that users can deploy fast. All this allows non-custodial staking. Users can run SSV nodes and run validators.
The ssv.network can optimize rewards to operators who minimize slashing risks, increase fault tolerance, and optimize performance. SSV mitigates failure and reduces the risk of attacks by keeping validator keys offline and decentralized. No single operator has custody or access.
They claim you can deploy the ssv.network quickly because network operators manage pool validator nodes. This allows users to focus on building staking applications. SSV claims the nodes are fully customizable.
Uses of the ssv.network include staking pool smart contracts, SSV network smart contracts and beacn chain validators.
Projects running the ssv.network include Onestar, Infinite Lux, Cashimr, blockscape, the Swell Network, Ankr, stader, Specturm, Stardust Staking & Solutions, and Onestar. For example, Stardust operates validator nodes that support blockchains, including Oasis and Solana. Plus, Infinite Lux offers passive income through staking.
What value can the ssv.network (SSV) obtain?
Hence, the ssv.network (SSV) is a protocol that helps other protocols stake Ethereum (ETH).
There is money in Ethereum staking. For example, Cryptoquant estimates the total value staked in Ethereum was $15.008 billion on 27 November 2022. Cryptoquest estimates the Total Value of Staked Ethereum grew from $11,616 on 3 November 2020, when Ethereum staking began. The total value of Ethereum staked grew to $8.374 million on 23 November 2021. Notably, Cryptoquant has not reported a total value staked for Ethereum since 27 November 2022.
Mr. Market pays some attention to the ssv.network (SSV). It was CoinMarketCap’s 21st most trending cryptocurrency on 27 December 2022. CoinMarketCap gave SSV a $10.30 Coin Price, a $103.022 million Market Capitalization, a $113.069 million Fully Diluted Market Cap, and a 24-Hour Market Volume of $1.441 million on 29 December 2022.
SSV had a $1.4 million Centralized Exchange (CEX) Volume and a $13,431 Decentralized Exchange (DEX) Volume on 29 December 2022. They base these numbers on a Circulating Supply of 10 million SSV and a Total Supply of 11 million SSV. The ssv.network was CoinMarketCap’s 182nd ranked cryptocurrency on 29 December 2022.
In contrast, CoinGecko ranked SSV 257th and gave it a $10.30 Coin Price on 29 December 2022. CoinGecko gave the ssv.network a $72.128 million Market Capitalization, a $982,661 24-Hour Trading Volume, and a $114.04 million Fully Diluted Valuation on 29 December 2022. They based those numbers on 7.006 million SSV Circulating Supply and an 11.077 million SSV Total Supply.
I think the ssv.network (SSV) is an interesting defi protocol that serves a genuine need. I believe Ethereum will grow and the demand for Ethereum staking will increase because Ethereum is the most popular blockchain.
For example, Etherscan found 729,418 Ethereum Request for Contact (ERC-20) token contracts on 24 December 2022. Hence, there are hundreds of thousands of projects that use the ssv.network’s staking.
Speculators who want to cash in on Ethereum staking need to examine the ssv.network (SSV).
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