ssv.network

What is ssv.network (SSV)?

ssv.network is an infrastructure provider that makes operating a decentralized Ethereum validator possible. Designed for building high-performance, secure, and decentralized ETH staking applications, ssv.network makes distributed staking possible for all categories of users.

SSV stands for “Secret Shared Validator” technology, which splits a validator key for ETH staking between non-trusting nodes run by operators. What results for ssv.network users is a decentralized, fault-tolerant, and, most importantly, highly secure method for staking on Ethereum.

When was ssv.network Launched?

Originally a research paper conceptualized in collaboration with members of the Ethereum Foundation, SSV was published in 2019. It has since grown into a community-driven network governed by a DAO (decentralized autonomous organization).

ssv.network carried out its proof-of-concept in 2020 before launching its testnet in 2021 following the receipt of an Ethereum Foundation Grant. In January 2022, ssv.network launched the first iteration of its incentivized testnet. The second iteration followed in July, with the mainnet launch viewed as the next step.

How Does ssv.network Work?

Ethereum’s new consensus layer, previously known as one of Serenity, Ethereum 2.9, and Eth2, features validators run by node operators willing to lock up their Ethereum in a smart contract. This is called “staking.”

Unlike delegated proof-of-stake systems, Ethereum requires stakers to run a dedicated software validator client along with a legacy Ethereum node and a Beacon Chain node. This is a technologically complex process that is inaccessible to most people.

Keeping a validator online and securely storing a validator key is even more challenging for ordinary users, and stakers risk losing a portion of their ETH rewards for small downtimes due to slashing if they go offline for an extended period.

ssv.network’s SSV technology, also referred to as Distributed Validator Technology (DVT), changes all that. SSV is a protocol that encrypts a validator key and splits it into four KeyShares. These KeyShares are then distributed to four non-trusting nodes run by operators, delivering robust, fault-tolerant, active-active redundancy for ETH staking.

If a KeyShare is unavailable or an operator node is faulty due to scheduled maintenance, errors, or even a hack, the rest of the KeyShares respond. This allows the validator itself to continue its duties without pause.

Importantly, nodes on the network don’t need to trust each other to operate, and no single node can recreate a validator key signature on its own. Neither can a single node make unilateral decisions on behalf of a validator.

ssv.network has two distinct layers that allow it to operate. The first is the SSV peer-to-peer network layer, which is the execution layer. It reads the current operator list and validator KeyShare assignments from Etherem smart contracts and operates the validators on the network.

The second layer is the Ethereum contract layer for network governance. Here, SSV operators are assessed and ranked, resulting in a decentralized and transparent network score of their quality, experience, and service. Actions like adding an operator, creating a validator, and distributing fees occur on the contract layer.

What makes ssv.network Unique?

ssv.network allows operators to configure their node to operate their KeyShares in any way they see fit. Operators can even leverage different validator clients on completely different infrastructures from anywhere in the world.

This lets SSV stakers diversify their validators and risk between different operators, geolocations, validator clients, and other infrastructure vendors.

How is the ssv.network Network Secured?

When a distributed network of nodes runs a validator, the chance of a breach or slashing decreases significantly. If one node fails, the others can keep the validator active without pausing. For this reason, ssv.network offers additional security benefits to stakers.

With SSV, the validator’s private key can also be generated and stored securely offline while the KeyShares that represent it operate the validator. This is advantageous because stakers retain control of their private keys, and theft from a bad actor is far less likely.

By trustlessly splitting a validator key across different systems, SSV presents an Ethereum staking solution that reduces reliance on one single component. This eliminates single points of failure that may affect validator performance and safety. It also helps to decentralize Ethereum as a whole.

What is the Use of SSV?

The SSV token is used as the ssv.network payment layer, creating economic incentives for operators. Each operator can determine their fee and compete with other operators for stakers.

These stakers then choose multiple operators to manage their validators and must retain a minimum SSV token balance to pay their operator fees. Stakers that fall below the threshold balance become subject to liquidation.

SSV tokens are also crucial to maintaining the open-source, decentralized nature of the network since SSV holders shape the SSV DAO through submitting and voting on governance proposals.

Who Controls ssv.network?

ssv.network’s decision-making component is handled by the SSV DAO and SSV token holders. The DAO is responsible for scoring operators, an essential factor for stakers to decide which operators to use. DAO decisions can also remove an operator from the network.

The network fee paid by stakers to use ssv.network to run their validators is also controlled by the DAO and can be changed if required by a governance decision. The DAO is also responsible for distributing grant funds to initiatives that the community has voted to pass. It also makes other Treasury decisions covering accumulated fees and investment inflows.

How Much SSV is In Circulation?

ssv.network has a total supply of over 11 million SSV tokens in circulation. You can view the SSV token contract and its distribution using Etherscan.

How Do You Buy SSV?

As an ERC-20 token on the Ethereum blockchain, SSV is relatively easy to acquire via decentralized exchanges like Uniswap. It’s also possible to buy SSV tokens on various centralized exchanges, including a handful that are considered top-tier.

How Do You Store SSV?

You can store SSV tokens using any Ethereum-compatible wallet. This means that hot wallets like Metamask can be used to store SSV, as can hardware wallets like Ledger and SafePal.

Is SSV a Good Investment?

Ethereum is one of the oldest blockchains in existence, but crucially, it also forms the largest ecosystem of projects in the industry by a wide margin. While other layer 1 blockchains can claim to be better in various ways, Ethereum has a considerable and perhaps even unstoppable network effect.

In this context of Ethereum dominance, ssv.network settles into a very significant niche. No blockchain can survive without validation, and Ethereum validation puts very stringent requirements in place. ssv.network helps a variety of users deal with these requirements and, what’s more, helps to further secure and decentralize Ethereum as a whole.

If Ethereum continues to grow and validation remains as difficult as it is, it’s very difficult to wager against ssv.network carving out its share of the pie.