Decentralized Eth2 staking pools
A decentralized staking infrastructure, the Pools Blockchain makes Decentralized Staking Pools a reality for Ethereum 2.0. In order to maintain the integrity of the Eth2 protocol, while not compromising on security and network participation, Blox is designing a dedicated staking pools blockchain based on Secret Shared Validator nodes, a project under development with the Ethereum Foundation. The Pools-Chain will manage a vast network of staking pools – maintain their security, liveliness, and robustness, all without a centralized authority or single point of failure.
Each staking pool on the network is based on the concept of a Secret Shared Validator (SSV) whereby a validator key is split into multiple signatures (multisig). SSV nodes leverage Shamir’s Secret Sharing cryptographic algorithm, whereby a ‘secret’ (validator key for the purposes of the pools) is divided into parts. To reconstruct the secret, a minimum number of parts is required; for the staking pools, the minimum threshold of signatures needed to reconstruct a single validator key and sign attestations on the Beacon Chain is ⅔.
The pools exist as an additional layer between a validator and the Beacon Chain.
A consensus mechanism is required In order for the pools to operate. In essence, the Pools-Chain is a collection of multisig wallets (the pools) governed by a consensus mechanism that organizes & liquidates pools, assigns active participants (Block Producers) to perform duties on behalf of the pools, and distributes (bETH & CDT) rewards.
Users empowered to stake any amount, stay fully liquid and have the added safety of operating in a decentralized network – Pool Stakers will stake as little as 0.1 ETH, with no infrastructure requirements. Pool Stakers will deposit ETH and receive bETH (ERC-20) tokens, which represent their staked ETH and can be transferred and traded affording the user full liquidity of funds even before transfers are enabled in later Phases of Eth2.
The Pool Stakers’ ETH will be assigned to a staking pool for Beacon Chain staking and as rewards are generated, stakers will receive additional influxes of bETH against the increased amount of ETH in their pool.
Pool Stakers will share a nominal percent of their bETH rewards with other network participants as a fee for passive Eth2 staking. The bETH will be distributed amongst CDT Stakers by way of the CDT Vault.
Block Producers (BPs)
Bonded actors who secure the network (much like validators on the Beacon Chain) and perform pool duties assigned by the Pools-Chain. BPs will stake ETH and earn rewards from the Beacon Chain as well as run the required infrastructure (dedicated validator client) for the execution of Pool duties on behalf of the Pool Stakers.
BP’s staked ETH will be collateralized as an additional layer of security against malicious activity. As bonded actors, BPs will not be required to pay a portion of their ETH staking rewards to the network.
A BP will be assigned by the Pools-Chain to perform duties on behalf of a pool – this is crucial for network decentralization and liveliness as no one single BP can jeopardize an entire pool or the network.
BPs will receive CDT rewards for the correct execution of Pools-Chain duties in addition to their Beacon Chain rewards. The amount of CDT received will depend on their total amount staked, and therefore the total amount of duties they are granted to execute on behalf of the Pools. As an additional, optional incentive mechanism, BPs may stake their CDT rewards in the CDT Vault and receive additional bETH rewards.
Blox native token CDTCDT INTEGRATION
CDT Staking / The CDT Vault
Any CDT holder, including BPs who receive CDT rewards, can stake CDT in a dedicated Vault and receive bETH rewards. The bETH is derived from the Pool Stakers’ service fees.
Given that the issuance of CDT rewards to BPs will cause an inflationary pressure on the supply of the native token, CDT Vault staking is aimed at reducing overall token velocity.
The decentralized staking pools are currently under development and are expected to launch late 2021. Check back for development updates on the Blox blog.