In the continually evolving landscape of digital finance, ssv.network has made waves with the release of a blockchain solution focused on liquid staking. The primary objective is deploying applications that offer staking products, thereby driving a higher level of process decentralization.
This move comes against the backdrop of escalating concerns about certain aspects of the staking mechanism employed in securing the Ethereum blockchain. Simply put, the bulk of operations are at present relegated to a few centralized staking providers that have cornered the market. These players collectively hold over 70% of the staked ETH supply.
Among these ‘centralized’ entities are exchanges Binance, Coinbase, and Kraken, accounting for approximately 18% of total staked ETH. Meanwhile, liquid staking providers including Lido, RocketPool, Stader, and Stakewise claim over 36% of the market, with Lido enjoying the bulk of the share.
Both liquid staking and exchange-based staking, despite being multifaceted, are ultimately centralized and custodial in nature. This bead of concentration within the crypto landscape has understandably ruffled feathers within the expansive crypto community.
However, ssv.network is confident that roping in partners and the community will lead to reciprocal enhancements. Alon Muroch, protocol lead at ssv.network, chalks it up to the potential of attracting an additional user base that generally tends to be wary of putting all their trust in single entities yet finds independent staking slightly too labyrinthine.
That’s where the salient feature of the SSV mainnet comes into play – it proposes decentralization, seemingly addressing the sticking point of centralization. Broadly, the idea revolves around the co-sharing of ar validator, an on-chain entity commanding 32 ETH via a network. The process essentially implies the simultaneous involvement of multiple operators in charge of creating blocks – the building blocks of the blockchain, pun intended!
The enforcement of this transformative system came into fruition after an intense research and development exercise spanning over two years. The venture kickstarted thanks to an EF grant that was received at the start of 2021.
This avant-garde staking setup from SSV requires no external coordination and is ruled by SSV smart contracts. Contrarily, the present cadre of staking providers functions as isolated entities pooling tokens from their users. The launch of SSV’s mainnet will eventually see a total of ten teams roll out their staking DApps, including notable names like Stader, Ankr, Stakestar, 01node, Metapool, StakeTogether, XHash, Chainup, Coindelta, and Claystack.
In conclusion, the initiative from ssv.network raises intriguing prospects for the future of staking. However, it remains to be seen if this approach could indeed paint a new paradigm for Ethereum staking and become the de facto standard in a concentrated ecosystem.
Source: Coindesk
