Application of DVT Distributed Validation in SFT Protocol
1. Introduction of DVT Distributed Validation Technology
PoW will shift to the PoS consensus mechanism. People hope that PoS can reduce energy consumption and barriers, but some people are worried that PoS will lead to more network centralization control because people who hold a large number of shares will have more voting rights. Therefore, after the merger is completed, developers need to actively participate in development and testing to minimize potential network failures, improve decentralization, and expand the network.
According to Ethereum’s roadmap, distributed validation technology will be the next key after Ethereum’s merger. According to the latest report from Messari, DVT can improve the security of validators, so DVT may be one of the main developments of the Ethereum network.
2. What is DVT?
- Consensus: Assign the responsibility of a single validator to multiple co-validators. In order to complete the signature, co-validators need to vote and reach a consensus.
- M-of-N Threshold Signature: The validator’s private key will be divided into N parts, and each validator holds 1/N of the private key. When M validators vote and reach a consensus, the signature can be completed.
3. Working Principle of SFT Protocol-DVT
DVT consists of four key parts, including distributed key generation, Shamir key sharing BLS signature, secure multiparty computation, and DVT BFT consensus layer.
- Distributed Key Generation (DKG): All participants will be assigned encrypted private keys to prevent one party from directly controlling the entire private key.
- Shamir’s Secret Sharing: Secret sharing means that the private key is split and distributed to different participants. If the private key needs to be reset, a pre-defined share threshold (e.g., 3 out of 4) needs to be combined.
- Multiparty Computation (MPC): Multiparty computation is a crucial part of distributed validator technology. By scaling computations, operators can use their private key shares to sign messages and perform computations without rebuilding on any single device. Multiparty computation enables operators to coordinate key generation and reconstruction in a distributed and secure manner on different machines.
- Consensus Agreement: Fault tolerance is achieved through the threshold signature scheme Beacon node consensus algorithm. After the ETH validator is connected to the Beacon node, consensus can be reached.
4. Using DVT to Solve Risk Issues in SFT Protocol
4.1 Centralization Risk
Combining distributed validator technology (DVT) with the SFT protocol can further strengthen efforts to reduce centralization risks in the blockchain network. The SFT protocol prevents power and resources from being concentrated in the hands of a few entities through decentralized methods, while DVT promotes decentralization through the use of various consensus mechanisms, ensuring a more inclusive and decentralized network. Integrating the SFT protocol with distributed validator technology can provide a more robust and resilient infrastructure for Web3 applications while maintaining high security and data integrity. Combining the SFT protocol with distributed validator technology can help address centralization risks in the blockchain network and ensure a more distributed, inclusive, and secure ecosystem, promoting innovation and growth in the Web3 field.
4.2 Single Point of Failure
Private keys are critical for independent validators because once lost or forgotten, access to assets is lost. PoS prohibits redundant protocol rules and merges the rule that each validator can only sign for one validator. This means that if problems such as node downtime, hacker attacks, etc. occur, single-node validators without fault protection will directly damage the assets of validators and further affect the overall stability of Ethereum.
4.3 Double Sign Penalty
If a validator signs with the same key multiple times, users will lose part of their staked amount if network failures, cloud failures, and other problems cause offline. This situation may have a negative impact on users’ financial situation and may require them to find other staking mechanisms to protect their investments. To avoid this situation, validators are recommended to sign with different keys to reduce the possibility of this happening. In addition, validators should also consider setting up their system for automatic backup to prevent data loss. These measures can help validators and users protect their investments and reduce potential financial losses.
4.4 Fork Penalty
Under the PoS system, validators need to connect to Beacon nodes for verification. If the connected node fails, the PoS system will establish a fork to protect the entire system. However, this may result in validators being deemed offline and punished.
To solve this problem, some new technologies are being studied and developed, such as using multiple validators to enhance system robustness. At the same time, better node management and fault recovery mechanisms are also necessary.
The purpose of blockchain is to achieve decentralization, so the consequences of centralization and centralization are contrary to it. Security threats and asset penalties may cause users and validators to lose confidence and have a negative impact on the entire system. Therefore, creating a more secure and stable PoS system is very important.
5. Advantages of Using DVT?
As a validator running as a node cluster, DVT has high resilience and low risk, so it can improve the stability of staking.
- For large validators, DVT can guarantee high availability and reduce infrastructure costs: improved redundancy and lower risk of reduction can allow fewer validators to operate more nodes, thereby reducing hardware costs; by allowing client configurations and addresses to run on multiple nodes, DVT can reduce the risk of failure of a single address or client.
- For small validators, DVT can provide protection levels comparable to large validators: using DVT small validators can provide efficiency comparable to large validators;
- For SFT liquidity staking protocol, DVT can improve efficiency, reduce risk, and allow operators to participate: by providing redundancy in the network, DVT no longer relies on any one operator that may cause offline downtime; in addition, operators can improve the performance of the staking protocol by organizing into different clusters.
