Will - Simple DVT: Advancing Network Decentralization with Distributed Validators

Transcript

so here's what we're going to talk about today uh it's the new simple DVT module that has been proposed and accepted to the Dow uh we're going to talk about what this module is why it should be added to the protocol uh a couple factors to consider around economics risk mitigation uh and then we're going to go uh pretty deep into what the timeline looks like uh around this so simple DBT what is it so this is uh the second module that we added to the Lio protocol uh following the addition of the staking router in in this prior May uh and very importantly what this will do is leverage the existing design of the uh curated module which you know when you think of Lio you think of the Curative module this is the 37 node operators that run validators using the protocol and basically this

will be copied uh and created as the second module utilizing the processes that the Lido contributor team the obal team the SSV team have all developed over prior test Nets so we've currently done uh two test Nets in the past there was one most recently in this last spring where we had 70 non- Lio node operators participate many of these being solo and Community stakers uh we've just kicked off our third round of test Nets uh we have a bunch of people participating in the obal side so far we'll talk more about that and SSV is going to be kicking off uh later this week as well so you know as I've mentioned and this is really the point that I get most excited about it's the point that I think when I speak with community members when I speak with other Lio contributors we're all fired

up about right this module is going to bring on a ton of new solo stakers Community stakers other professional node operators also include uh members of the curated set but in general the goal here is to include as many people as possible and really give people an opportunity to use Lio to run validators so initially the modules plan to be capped at 0.5% of total Lio stake uh that's 1,350 validators give or take like 20 depending on where stake is today uh it is possible that that threshold could be raised slightly but there's a few key points on this slide so this is not by any means intended to be uh used for indefinite use the module modle is really here to to battle test DBT on Main net it's a fairly new technology uh and then it will be wound

down within 2 to 3 years and the reason this is because this is just a stepping stone on the way to more scalable uh modules utilizing DVT with permissionless elements right so in the future you could think of obal you could think of SSV having custombuilt purpose built modules that are really scalable allow any solo Saker uh Community Staker to participate in different ways but this is a really good way to start bringing on new node operators to the protocol uh in such a way way that they can participate uh and also really stress test DBT uh the module will have a 10% reward share very similar to the existing module uh 8% of that will go to node operators and DVT provider 2% to Lido we'll talk a little bit more about that too so why should simple DVT be added uh like first off and I've sort of

touched on this like DVT in my opinion and I think in many people's opinions is the fastest way to bring on new node operators to the protocol right so if you just think about what the initial proposal calls for uh there's a test net performance period if that goes well and the module is actually brought online we would start with 24 clusters uh 12 being obal 12 being SSV uh generally with a five of s threshold uh assume that uh at least six of those are non- lioc curated members that's immediately 144 new node operators participating in the protocol versus the curated set today which is 37 node operators so you're talking 400% growth off of a small number but it's really significant right and if you think about what the 0.5% cap allows for maybe within the next 8 months you're

thinking about uh around 360 total node operators if you added a significant amount of that through net new node operators that's 800% growth in8 months in the account of node operators and these node operators under this threshold could be running 25 validators each in distributed clusters it's uh it's a really really exciting first step in my opinion number two is DBT really has the potential to improve the decentralization distribution and resilience of infrastructure right and so when I think of DBT and like I spend a lot of time with with our teams like uh in general at Lio like thinking about validators at a macro level thinking about uh the validator node operator metrics that the the Lio contributor team puts together every quarter looking

at uh clients uh GEOS but when you look at a DVT right you can really take this down and break it down at the micro and and that's pretty cool for a number of reasons so from a resilience perspective you might have three solo stakers using Nooks you might have two in the public Cloud you might have one in a bare metal Data Center and all those different servers could be in completely different GEOS they all could have different execution layer clients they all could have different consensus layer clients and so all of a sudden you've got this almost super resilient validator that like would be very hard to go offline because if you really can mix around with the the uh the distribution of these different qualities it would be quite difficult to like break the threshold um so I think that this is a

really great thing there's great Security benefits and it's really going to be helpful I think to the network overall as dbts adopted at wider scale and so number three is really that we need to battle test DVT on mainnet I think the SSV and obal teams have done a really tremendous job over the last couple years developing these protocols uh but they're they're very early in their main net ramping stages and so we're getting there and this is a great first way to use this with the protocol so uh going to touch on the economic side here because there's some different factors to consider with DBT versus running a solo validator right so the module calls for 10% reward share similar to the curated module uh 2% of this would be the treasury share and then there's an 8% module share and so the module share is what goes to the uh

node operators and DVT providers and this compares to a 5% split for the curated module so the thing that you really have to consider with a DVT uh validator right if you're a solo Staker running a 32 e validator completely by yourself like ballpark numbers that's around $2,500 today like USD but if you now divide that by seven it's not incredibly exciting to commit to like three years of running this right so by adding a little more of the incentive to the uh node operator side that's quite quite helpful and we're also going to talk a little bit more about this in the timeline because there's another I think pretty exciting part of the uh economics to touch on uh from the DVT provider side so the obal team will be receiving 1% of the rewards for the uh clusters that obal participates in and SSV will

be receiving rewards via the SSV token uh or network fee uh you can read more about how that works in the SSV documentation but but fairly smooth uh and so both Solutions we really want to be able to help support going forward right because there's services to the modules helping node operators troubleshoot uh there's future development of DVT that we'd like to see and and and both providers have like pretty ambitious road maps going forward the next thing to talk about and just sort of quickly would be risk mitigation so given that DBT is fairly new to mainten net it's an early stage technology uh the Dow considered in the vote uh different ways to uh mitigate this risk and so two were considered it was one using the existing Lal cover fund and two using thirdparty cover uh would highly encourage you to check out

the research proposal uh on the Forum about this uh to to see why but the Dow did end up going uh with the cover funds to provide cover for this module uh and then final point on this slide so both Obel and SSV have both completed their first round of audits and they've both committed to the Dow that they'll Continue to update the Dow uh going forward as new additions to their protocols come into into light uh and so that's pretty encouraging as well so all right the uh plan of action and timeline so Step One is now complete that finished at the beginning of November when the vote successfully passed uh there was about a 3 and 1 half week discussion period for the Dow around the simple DBT module uh it was a pretty interesting Forum thread uh and the vote successfully passed right so

now we're on step two and uh very excited to say that the simple DBT module is actually deployed on heski and there is node operator entries created uh we're in the process of getting the obal Clusters set up uh this week and last week and hopefully by the end of this week actually uh really started in running validators we'll talk more about that in a moment uh assuming that this all goes as planned uh then the onchain vote to add the second module will uh like take place on chain for mainnet and then there's the addition of something called the simple DVT module committee and so this would be a multisig made up of Obel uh SSV Lio contributors and member of of the lidon node operator subance group so the lion node operator subance group is a subgroup of the Dow made up of uh multiple independent node

operators some Li on ethereum node operators Li on polygon uh these node operators would all collaborate with the uh performance criteria which are all outlined in the uh Forum proposal these are things like making sure uptime is good making sure the block proposal success rate is good and through that they'll start to add clusters to mainten that and and there will be a proposal to the Dow uh the Dow will have a chance to to sort of weigh in and have any feedback but if that goes well the simple DVT module committee is responsible for creating the entries on Main net so that there's an easy way to do this without uh like over the next couple months is we add more clusters uh but it's still veto by uh by the Dow and then also raise key limits following this there's a monitoring period for 30

days we'll make sure everything is going well if that goes well then you'll go from 24 clusters to let's say 40 maybe 60 after that after another 30 days to really start scaling this and each time hopefully bringing on many new node operators to participate right uh next would be this uh step seven and I'm pretty excited about this because I think it's quite cool so if everything goes well uh 3 months after deployment you've added clusters the validators are performing well uh we're we're considering having the LSG should consider having uh this term called Advanced node operator and really all this is is just a classification term to sort of differentiate but what this would be would be a ton of solo sakers hopefully a ton of community stakers professional node operators all working together that have shown really good

performance on the test net shown really good performance on mainnet uh and if a cluster is made up of 50% plus uh Advanced node operators then they could have be running something like 50 to 100 validators and when you think about a solo Saker that's joined this module that's a pretty cool opportunity in my opinion it's uh I I think we're seeing a lot of enthusiasm in the test net so far finally then you have the wind down period after 2 to 3 years this will be replaced by scalable modules where there's no curation there's none of this like process around it right you will have some way to participate permissionless and there's a lot of discussion going with the OBO and SSV around this uh in addition to that there's the community staking module uh we'll touch on that at the end but definitely check out Demetri's talk

tomorrow so in terms of the test net you can see in the map here in the background uh the highlighted countries are where we have about % of the node locations currently in the obal test net really exciting to see a lot of geodiversity here uh there is currently 203 unique participants in this test net 60 of them are Solo stakers 65 of them are Community stakers most of the community stakers are are pretty much solo stakers as well so it's been uh really exciting to have like broad participation within this so far uh we have them around 32 clusters uh each with a five of seven threshold uh so the Clusters are in the process of getting their cluster config signed for Obel uh and they're starting their dkg processes I believe we have about five or six done that I looked earlier today that should

be wrapped up at the end of the week validators will GoLine and then it starts a 45-day monitoring period following that the SSV test net will start at the beginning of next week uh we expect an additional 100 plus unique uh participants uh there's 224 total so there's some repeats between both uh and then testing will start soon after again a 45-day period uh and this is uh also quite important because we'll test me boost with both protocols for the first time and uh s V's dkg for the first time as well so uh finally and and definitely highly encourage you to pick up your phone scan this QR code right if you're interested in participating we're doing another set of test Nets uh starting in early 2024 we'll be kicking off probably January if you a solo Staker if you a

community Staker if you're a professional node operator like please sign up because the the criteria to participate in test net is really really easy all you need to do is basically set up an oble node set up an SSV node run a validator show proof that you were participated and we're like very happy to have you participate in testet and go from there and really what we're hoping to have is many highly performant uh participants eligible to participate in main neet going forward it could be anyone in this room like seriously I'm not the most technical person I could do this quite easily so I I really encourage you to finally definitely check out the uh the Lio Booth uh Tomorrow there's going to be a raffle the time should actually be 545 but you can go there and uh someone will have the chance to win one

of these beautiful Lio boxes so thanks so much happy to take questions if there are any appreciate it thank you all that was great do we have any questions from the audience anything maybe you could point out for the room uh what the difference between the solo and the community Staker is just to make it clear for everyone who's not familiar with the terms sure so so Community Staker is generally the term that Lio uses for or Lio contributors

rather use uh for like groups of cluster participants who who generally like work together and this is quite common in DVT so you may be like two friends that run a validator together and like practice together on testnet um you might just be a solo Saker that's like part of some kind of Affiliated group but in general it's very similar to a solo Saker like a small org uh that is like friendly and like with each other yeah hello thanks for the initiative looks all very exciting now that I see the the boxes here on screen

is there any preference or any splits that you guys anticipate in onboarding new validators that run infrastructure from home rather than from data centers so the preference in general would be to have more solo stakers running from home uh it was interesting to see that uh there's still probably about 15 to it was like 8 to 15% I believe of the initial wave that applied to run boxes from home there's quite a few that were running public Cloud uh because it was easier to set up um but in general there's no like Target what we're really trying to optimize for in terms of diversity is geograph uh geography and really trying to get the client side done too um I think Hardware is like the next step for us to focus on like going forward and hopefully we'll see that as we bring on more solo

stakers any more questions all right well let's give another round of applause for will thank you