SSV for Blox Staking Users

SSV for Bloxstaking Stakers
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Word is starting to spread about SSV (Secret Shared Validators) in the Ethereum staking community. Maybe you’ve heard of SSV, maybe you haven’t quite yet. What’s certain is that as a current user of Bloxstaking’s non-custodial staking service, you WILL hear about it and it’s important to us that you clearly understand what SSV technology is and how it improves on the existing staking model you are a part of.

In this article, we’ll show you some challenges with how ETH must currently be staked, and how SSV effectively mitigates those challenges by introducing new levels of reliability, scalability, decentralization, and diversity for Ethereum validators. We’ll also introduce you to some new things that SSV brings such as operators, testnet, SSV token, and the plan for taking SSV to the Ethereum mainnet. There’s a lot to learn, so let’s get started…

What are the challenges of running a validator in the current staking model?

As you are likely aware, if your validator goes offline, even for routine maintenance, it will incur penalties and be unable to earn rewards. Therefore, as a staker, validator liveness is of utmost importance. However, strict Ethereum protocol rules prohibit a validator key from being active on more than one validator client at the same time, preventing redundant, fault-tolerant configurations. All slashing instances to date have been the result of people trying to achieve active-active redundancy and fault tolerance for their validators. As a staking provider, this limits our choices and configuration options.

As a result, your validator currently exists and performs its duties from a single machine running a validator client (node). For a higher level of validator client diversification, Bloxstaking has recently included both Prysm and Lighthouse software clients on our nodes. However, as we pointed out before, the protocol rules dictate that your validator can only run on one of them. In addition, your validator key can only be stored on one cloud server (AWS), and it must also remain online for the validator to operate properly. Keep in mind, with Bloxstaking, you retain ownership of your private keys as we have always been a non-custodial staking service. Like we say, “Not your keys, not your ETH”.

So, what is SSV?

On the surface, SSV (Secret Shared Validators) is a protocol that provides access to a robust, decentralized staking ecosystem on the Ethereum blockchain. Diving a little deeper, SSV is a sophisticated multisignature wallet, with a consensus layer, that acts as a buffer between a node on the Beacon Chain and a validator client. It was started back in 2019 as a research paper by the Ethereum Foundation to address the issues mentioned above. Now, SSV is a grant-funded community-driven project with the Bloxstaking team contributing a sizable amount to its continuing development.

SSV for Bloxstaking Stakers

To put it simply, SSV effectively eliminates staking risks by allowing your validator to run on four nodes, instead of a single one. This achieves active-active redundancy without violating the Ethereum protocol rules and provides a fault-tolerant, slashing-free, decentralized security layer that allows stakers like you to sleep soundly at night knowing your validator is safely attesting online.

How does it work?

Instead of the validator key being stored on one machine, SSV, aka DVT (Distributed Validator Technology), uses Distributed Key Generation to encrypt and split it into “KeyShares”. These KeyShares are then securely distributed between four non-trusting nodes, run by “operators”. “Non-trusting” means the operators do not need to know or trust each other to perform their duties. It also means that the network can tolerate a certain number of faulty or offline nodes (up to the threshold) without affecting validator performance or incurring slashing penalties.

With SSV, you never have to give your private key to operators. Instead, once your validator private key is generated, you can store it securely offline and let the KeyShares that represent it operate the validator. Now, when your validator is called on to perform its duties, if one KeyShare is offline or faulty (due to scheduled maintenance, error, etc.), Shamir Secret Sharing, Multi-Party Computation, and Istanbul Byzantine Fault Tolerance Consensus work together to allow the other KeyShares to create the signature. As a result, your SSV validator will continue to perform its duties without fault, pause, or penalties.

SSV for Bloxstaking Stakers

As we mentioned earlier, Bloxstaking has diversified its validator client offerings to include Pryzm and Lighthouse and, while this is a step in the right direction, SSV will allow you to diversify your risk even more by letting you choose any operator configuration you want. If you like, you can have four different operators that run four different validator clients, in four different regions of the world, using four different hardware and internet infrastructures! With SSV, the choice of how you run your validator(s), along with the cost to run them, is entirely up to you.

What are Operators?

Operators are an extremely important component of staking with SSV. They provide the hardware infrastructure, run the SSV protocol, and are responsible for maintaining validators and the overall health of ssv.network.

Because the network relies on operators, a decentralized and transparent score of their quality, experience, and service, on a scale of 0-100%, is provided. As a staker, you can view and use these rankings, along with the Verified Operators List, to choose the operators that will manage your validator(s). Bloxstaking is one of several Verified Operators on ssv.network, and while we would like you to choose us, it is certainly not required. Also, keep in mind, you can change operators anytime you like. At the same time, each operator is free to determine their fee for services in SSV tokens and charge you accordingly for operating and maintaining your validator(s).

Has SSV been tested?

Yes! SSV has gone through one full round of testing on a public testnet called “Primus”. Primus completed five rounds of testing in epoch 84,838 on April 4, 2022.

This version of testnet allowed users to stake goETH and allowed the option to stake SSV along with it, earning the user real SSV tokens in the process. Real operators also joined in to run validators on behalf of stakers, allowing the interactions between validators and operators using SSV technology to be stress-tested using simulations of real-world transactions.

Here are some stats from Primus Testnet to show you the level of participation:

SSV for Bloxstaking Stakers

Of course, Primus was not the “end all, be all” by any means. Version 2 of the SSV testnet is on the horizon and it will include the introduction of operator fee management, fee accounts for stakers, and an overhaul of the contracts that will make it much easier to create a validator from scratch. You can view the draft spec here, and the implementation plan here. We encourage you to get involved, so stay tuned to find out more! You can also learn more about why it’s important to stake SSV and how to do it, by reading this article.

How do I convert my CDT to SSV?

If you currently own CDT, you can convert it to SSV tokens. The exchange rate is:

100 CDT = 1 SSV

By converting your CDT to SSV, you are upgrading to the native token of ssv.network. By holding SSV tokens, you are entitled to vote on proposals submitted to the DAO. In addition, you can stake your SSV tokens on testnet and earn more SSV as a reward! To learn more about use cases for SSV token and how it works visit:

SSV Token

SSV Tokenomics

So, what does the future hold?

While that’s always a tough question to answer, plans are already in place to bring SSV technology to mainnet. As we mentioned, version 2 of testnet is coming, and we will need to go through at least 2–3 testnet iterations, each one closer to the final mainnet spec, for SSV to be ready for primetime.

As far as the transition to SSV staking for existing Bloxstaking users like you, we are planning on developing a “bridge” that will make the process simple. We fully believe that SSV is the future of staking and at some point, will transition to become the only way to stake Ethereum. When this time comes, we want to make sure it’s quick and easy for you to switch your validator from a “standard” Bloxstaking validator to an SSV validator managed by your chosen operators.

To read more about Bloxstaking CEO Alon Muroch’s outline for bringing SSV to mainnet, check out his blog post on the topic.

Conclusion

There’s certainly a lot to digest here as an existing Bloxstaking user. There are challenges with running a validator in the current staking ecosystem and SSV is a response to those challenges. The benefits are clear, even after just one round of testing and, as a staking provider, we believe SSV is in the best interest of the users of the network and the network itself, as SSV provides an unparalleled level of validator reliability, security, diversity, and decentralization.

You’ll be able to minimize your risk by running your validator on four nodes instead of one for active-active redundancy and fault tolerance. There are clear plans to bring SSV to mainnet and it will become the way to stake ETH. If you haven’t already done so, be sure to convert your CDT to SSV tokens so you can participate in the ssv.network DAO and earn rewards by staking your SSV on the next version of testnet. By participating before SSV gets to mainnet, you’ll be ahead of the curve and accumulate valuable SSV tokens in the process!