Distributed Validation Technology (DVT) is the key to building a decentralized future for staking in the crypto ecosystem. The switch from Proof of Work (POW) to Proof of Stake (POS) has led to centralization, with security being determined by capital. This has forced many people to participate in Liquid Staking on centralized exchanges instead of solo staking.
Staking as a Solution?
Liquid Staking offers a simple solution, but it cannot be done on your own. The solution lies in creating a new economic model that removes elements of trust from staking. Traditional staking requires trust in oneself or in someone else to do a good job, while delegating a validator requires trust in the person running it. There is also a risk of loss of 16ETH and a 10-year lockup if keys are lost or you go offline, and slashing risks are deterrents for casual validators.
Distribution as a solution?
Distribution is another layer to consider in building a trustless ecosystem. A large number of operators makes collusion more difficult, but it is still possible even in small groups. For example, Lido has 1% of staked ETH for each operator, and they are approaching the 33% critical threshold at the network level. Once one player coordinates nearly 2/3 of a network, centralization issues become more prominent and a main focus of concern.
DVT removes the custodial element from the private key, but it also changes the model, making collusion still a threat. An economic model is needed to ensure that it is unfeasible to attack the network, and to reward good operators. However, questions about how to ensure good faith, attribute losses, and eject bad actors remain unanswered.
The Diva Design
Diva is building Ethereum’s first Liquid Staking solution powered by Distributed Validator Technology (DVT), providing ideal conditions for both stakers and node operators. Diva is also the first solution to have node redundancy. Every validator is handled by 16 different nodes, where up to 5 nodes can go offline without any detrimental effect the network. This has a huge impact on performance, and reduces the bond to 1 ETH! Diva is the most trust-minimized network for staking, and provides the best and simplest conditions for node operators out there, making it accessible to anyone with a laptop.
The infrastructure of Diva is designed to be resilient, with an incentive model for self-healing the network and recovering 100% liveliness. Diva incentivizes diversity, making it super easy to bring your own Dappnode or machine, and install their docker package with zero config. Additionally, Diva removes trusted oracles using ZK proofs, making it a trust-minimized solution. Diva is working on the major challenges for Ethereum, including Distributed Validation, adapting to a post-withdrawals world, and dealing with MEV.
Building the right solutions and backing them with the right crypto-economic incentives is fundamental. Diva is rewriting the rules to build a decentralized future for staking in the crypto ecosystem.