Distributed Validator Technology (DVT): what you need to know about Obol Network and SSV Network

Distributed Validator Technology (DVT) is an approach designed to enhance the security and resilience of validators in blockchain networks. By distributing the responsibilities of key management and signing across multiple parties, DVT reduces risks and increases validator stability.

This is achieved by splitting a validator’s private key into several parts, each stored on different machines organized in a cluster. In the context of DVT, a cluster is a group of nodes that work together to operate a validator. These nodes share the responsibility of signing and validating transactions, ensuring no single entity has full control over the process.

This makes it significantly harder for hackers to gain access to the complete key, as it is never stored in full on any single device.

There are various implementations of DVT, each with its characteristics and methods of distributing validator responsibilities. Two of the most notable implementations are Obol Network and SSV Network. They use distinct technologies and protocols to ensure the security and efficiency of blockchain networks.

Obol Network is a collective network that provides technology and opportunities to scale Layer 1 blockchains and decentralized networks. Obol aims to become the standard for operating secure, resilient, and decentralized infrastructure.

Obol Ecosystem

The Obol ecosystem includes:

• Node operators: Can improve key security and node performance while gaining more delegated stake.
• Individual stakers: Enables home stakers to run nodes collaboratively, accessing new reward and incentive opportunities.
  Staking protocols: Can quickly scale and decentralize their protocol to improve security and resilience.

Obol also offers a modular product suite to support node operators at every stage, ensuring performant and slashing-resistant nodes.

Advantages:

• Enhanced security: Splitting private keys among multiple nodes reduces the risk of compromise.
• Resilience: The ability to keep operating even if some nodes go offline.
• Scalability: Allows staking protocols to expand quickly and decentralize, improving network robustness.

Disadvantages:

• Operational complexity: Requires coordination among multiple nodes and operators.
• Additional costs: Involves more resources to operate and maintain the distributed infrastructure.

Obol Network targets node operators, individual stakers, and staking protocols looking to enhance the security, performance, and decentralization of their operations.

SSV Network is a distributed staking infrastructure that allows validator responsibilities to be shared among minimally trusted node operators, increasing resilience, uptime, and network availability. SSV is an open-source protocol that enables distributed validator operations on Ethereum, ensuring security and decentralization.

SSV Ecosystem

The SSV ecosystem includes:

• Staking pools: Use diverse and resilient infrastructure to power their apps.
• Staking services: Retain full control of validator keys and withdrawal addresses, securing funds.
• Individual stakers: Can run validators across uniquely located operators, keeping full control over their keys.

SSV also provides a development hub for building apps on a secure and scalable distributed validator infrastructure, supporting various Ethereum use cases.

Advantages:

• High decentralization: SSV splits validator operations among multiple independent operators, eliminating single points of failure and boosting security.
• Enhanced security: Validator keys are split using advanced cryptography (Secret Shared Validator – SSV), ensuring no operator has full access.
• Availability: If one operator fails or goes offline, the others can maintain operations without severe penalties.
• Full control for stakers: Individual stakers and staking services maintain full control of their keys, reducing risks of theft or misuse.

Disadvantages:

• Technical complexity: Implementing and managing a distributed validator in SSV is more difficult than using a traditional validator.
• Associated costs: Because the protocol requires coordination among several operators, additional costs may arise compared to standard validation.

SSV Network is aimed at both institutional staking operators and individual stakers who want a decentralized, secure, and high-performance mechanism for operating Ethereum validators.

Obol Network uses a cluster-based DVT approach, where validators are managed through collaboration among nodes, ensuring moderate decentralization. Validator keys are shared among these collaborative nodes, requiring consensus among them to function properly. This approach offers solid protection against slashing and suits node operators, staking pools, and individual stakers seeking more control over their infrastructure.

In contrast, SSV Network uses a DVT system based on cryptographic key splitting (Secret Shared Validator), resulting in a higher degree of decentralization. Unlike Obol, each operator contributes independently to the validation process without requiring close coordination among nodes. This approach provides even better slashing protection and is ideal for staking services, staking pools, and individual validators seeking a more secure and decentralized solution.

Both Obol Network and SSV Network are implementations of Distributed Validator Technology (DVT), each offering significant advantages for the Ethereum ecosystem.

• Obol Network is ideal for node operators seeking enhanced security and collaborative cluster operation.
• SSV Network is better suited for those prioritizing stronger decentralization and security through cryptographic key splitting.

Depending on specific needs, users can choose the solution that best fits their staking strategy.