In a bid to bolster the decentralization of Ethereum staking pools, SSV.network has launched on the mainnet. The alternative staking infrastructure hopes to revamp private key security, and reduce the tendency for validator downtime and slashing penalties.
This initiative comes on the heels of criticisms pointing at a lack of decentralization in Ethereum staking pools. SSV.network, founded by Alon Muroch, has partnered with the Ethereum Foundation to develop a distributed validator technology (DVT) that will decentralize ETH staking pools and validators. Its public mainnet debut was heralded by over 10 decentralized applications for staking, getting a foothold in the SSV.network on September 14th.
A notable feature of the DVT technology is its capacity to decentralize the staking landscape that is majorly under the control of a few dominant Ethereum staking pools. This dominance has led to a significant amount of ETH being locked in the ETH2 staking contract. For SSV.network, its DVT technology is key to ensuring key management and signing duties are spread across various parties, thereby increasing validator resilience and reducing points of failure.
Sophisticated analysis from Nansen, a blockchain analytics firm, shows big players like Lido Finance (32%), Coinbase (8%), and Binance (4%) having substantial shares in staked ETH. Centralized exchanges like Binance, Coinbase, and Kraken reportedly hold around 18% of total staked ETH, while liquid staking pools like Lido, RocketPool, Stader and Stakewise account for over 36% of total market share. Prominence of such focused control can be checked by SSV.network’s alternative solution.
Muroch believes SSV can potentially increase validator private key security while maximizing rewards with its high performance, fault-tolerant setup that prevents slashing penalties for offline validators. This could signify a new era for private key security and effective distribution of management responsibilities in the cryptocurrency space.
Looking back to January 2023, SSV.network made the news when it unveiled a $50 million ecosystem fund to support projects developing around the DVT technology. The technology had been mentioned earlier by co-founder Vitalik Buterin as a vital aspect of Ethereum’s scaling roadmap.
Thus, the debate silently simmers — will SSV.network’s entry and its technology change the dynamics of the staking landscape? Only time will provide us with the answers. Blockchain enthusiasts and participants keenly watch as the story unfolds.
Source: Cointelegraph
