This paper explains the principle and development prospect of SSV Network technology

In early September, RocketPool, StakeWise, Stader Labs and other Ethereum LSD protocol initiators made a joint commitment to limit their market share to no more than 22% of the total staking volume, in response to the increasing centralization of the Ethereum staking market. However, Lido Finance, the market leader with a market share of up to 32%, did not make a statement on this, causing controversy in the community. In response, crypto KOL Poopman posted on his social platform that Distributed Verification Node Technology (DVT) plays an important role in preventing single point failures and achieving decentralization, and conducted a deep analysis of the relevant protocol SSV Network.

BlockBeats has compiled and translated the following content.

Background

After the Ethereum merge, the consensus mechanism has transitioned from PoW to PoS. At the same time, PoS has accelerated the growth of staking solutions such as Lido, but also increased the risk of protocol centralization (about 33% market share).

DVT stands for Distributed Validator Technology. This technology distributes the validator's private key across multiple computers to prevent single point of failure. In simple terms, DVT can be seen as a solution similar to multi-signature.

Here we need to explain the concept of validator node keys. After POS, validator node keys were introduced. This key is responsible for signing on-chain operations, such as block proposals and proofs. However, the key must be kept in a hot wallet.

DVT Technology Working Method

To understand its working principle, we first need to understand the four pillars of DVT:

1. Shamir's Secret Sharing and threshold cryptography;

2. Distributed Key Generation (DKG);

3.MPC；

4. Consensus.

Shamir's Secret Sharing

Imagine a chart where encrypted information is located on the Y-axis and a private key is divided into three parts and sent to nodes A, B, and C. To decrypt the information, at least two parts are needed to connect the circuit.

This is called 2/3 Shamir's Secret Sharing. Simply put, Shamir's Secret Sharing is an algorithm that divides a private key into multiple nodes. Each node only holds a small portion of the key, and unless the voting threshold (such as 3/4 or 5/7) is reached, no single node can sign a message.

In addition, POS uses BLS signatures, which allow multiple signatures to be aggregated into a single signature. Therefore, when a node signs a transaction, the BLS signature combines all signatures into one that can represent the private key of the validating node.

Distributed Key Generation (DKG)

However, the reality is that neither party should know the private key of this verification node, as it is highly insecure for the validator. In this case, DKG attempts to solve this problem by:

Each participant creates a secret share;

Then add up all these shares to get the final result.

Therefore, DKG is a process of creating key sharing and distributing it to each node. This process requires each participant to calculate the key and provide "randomness" for it, so that no party can obtain the user's private key.

Multi-Party Computation (MPC)

MPC is an important pillar of DVT. MPC allows operators to sign messages using only their secret sharing, without the need to rebuild the entire private key on any single device. This helps to reduce the risk of centralization of private keys.

Consensus Mechanism

In order to achieve consensus on a certain block between nodes, the IBFT algorithm selects a node as the block proposer and shares the block with other nodes. If consensus is reached, meaning approximately 66% of nodes agree that the block is valid, the block is proposed to be packaged.

However, if the block proposer goes offline due to hardware/software issues in DVT, IBFT consensus will select another DVT node as the block proposer within 12 seconds, and the fault-tolerant mechanism will take effect. (This ensures the robustness of the blockchain to some extent.)