Ethereum successfully migrated to a proof-of-stake consensus mechanism in 2022. And it kept its promise of simplifying staking for investors. Still, some users are facing problems with staking their tokens on the network. Thus, it may again create scalability issues in the long run.
Problems with Ethereum Staking
In a proof-of-stake consensus mechanism, the users need to stake their crypto tokens to become a validator. In the case of Ethereum, they need to stake 32 ETH tokens to become a part of the process. Not just that but they also need to run their validator client software to secure the network.
Unfortunately, every staker doesn’t have the technical expertise to run these operations. Moreover, the stakers are required to keep their validator key online so they may sign transactions after regular intervals. They may miss a chance of earning ETH tokens if they went offline for a short time.
They may even lose their staked ETH tokens if they got hacked or remained offline for a long time. Fortunately, the SSV network is trying to simplify the staking process so that more users can earn ETH while helping to scale Ethereum.
What is SSV.Network?
SSV network is the next-generation decentralized staking infrastructure that provides a better alternative to traditional staking solutions. It establishes a network of different non-trusting nodes by incorporating Secret Shared Validator technology. It distributes the responsibility of keeping validator keys online by splitting them.
These newly generated keys are recognized as KeyShares. Thus, it encourages more investors to participate in the process while improving the network’s uptime. SSV.Network offers an additional layer of security by allowing users to store the keys offline.
SSV Network can play a vital role in improving the decentralization and security of the staking applications. It can also boost the fault tolerance of these applications. Thus, it can be helpful for applications like staking pools, solo stakers, staking services, and DAOs. It can also facilitate users that are staking at an institutional level.
Understanding Non-trusting Nodes
In a traditional blockchain network, the nodes need to cooperate with each other to complete the transaction. And the presence of a faulty node can affect the entire network’s performance which ultimately reduces the transaction speed. A non-trusting node can independently perform its duties without having to trust other nodes.
Thus, it resolves the “single point of failure” problem in Ethereum while optimizing its performance.
How Does SSV.Network Work?
SSV Network is a staking infrastructure that splits a validator key into more than four non-trusting nodes to establish a distributed network of Ethereum validators. As mentioned above, the non-trusting nodes can successfully run the operations without having to trust other nodes.
Thus, the network achieves optimal performance. The network uses a consensus layer to consistently monitor the activities of each node. If one validator key from a group of four stops working for some reason, it doesn’t hinder the performance of others. And the other three participants successfully complete the transaction.
SSV Network offers a significant leap forward as compared to the existing staking schemes as it controls the centralization problem by encouraging more users to participate in the validation process. SSV Network is operated by three main participants:
Operators – The operators are required to lock their SSV tokens to cover the annual operator fees. These users perform a range of activities on Ethereum’s PoS execution layer. However, their main role is to manage validators. Thus, they help with securing the Ethereum Network.
Stakers – The stakers need to lock their ETH tokens with at least four operators. They also pay an annual fee to the operators for their contribution. Moreover, they also need to pay the network fees. However, they also get to earn rewards for locking their ETH tokens.
DAO Members – DAO members participate in the decision-making of the SSV Network. Even if a user holds one SSV token, he can participate in the voting process. Thus, they help with maintaining the decentralization of the treasury and the ownership of the protocol.
SSV is the native token of the SSV Network that is used to pay network fees. The SSV token holders are also eligible to participate in the network’s governance. Moreover, the operators receive SSV tokens for validating transactions. SSV network is also funding different projects through SSV under its grants program for developers.
This program is designed to boost the overall potential of the platform. With a circulating supply of 10 million tokens, SSV has a market cap of $359 million. It ranks among the 200 best cryptocurrencies in terms of market cap.
How users can Buy SSV Tokens?
SSV is registered on a number of crypto exchanges. But the problem is that users can’t directly buy it through fiat currencies. The users are required to purchase Bitcoin or other cryptocurrencies before buying SSV. They can then transfer funds to the exchange that offers SSV tokens. Binance is one of the leading platforms that offers SSV trading.
SSV is a decentralized layer 0 staking infrastructure that is designed to improve the scalability of Ethereum while encouraging more investors to participate in the validation process. It uses the Secret Shared Validator technology to consistently keep the validator keys online.
It also addresses the centralization problem by spreading duties among different users. If you need more information about how SSV Network works, feel free to get in touch with us.