Ethereum to introduce resilience-focused Distributed Validator Technology

Ethereum has always been a hub of continuous innovation in the crypto sphere due to the numerous upgrades and advanced features introduced to the network since its inception. That’s how the crypto project carved its path into the increasingly complex crypto industry and managed to become the second-largest digital currency after Bitcoin and the top altcoin in the market. Today, traders, investors and crypto enthusiasts alike can buy Ethereum on exchanges like Binance and enjoy all the perks it provides. 

But Ethereum’s development is far from over as the platform has big plans ahead. After an ambitious series of improvements, including the Merge, the network’s biggest upgrade which marked the transition from the former proof-of-work (PoW) consensus mechanism to the more sustainable proof-of-stake (PoS) protocol back in September 2022, and the Shanghai update which introduced withdrawal functionality for staked ETH in April 2023, developers are now turning their attention to the next major milestone in the network’s evolution, namely the introduction of distributed validator technology or DVT.

The Final Step In Ethereum’s Present Era 

Although it’s something that most crypto enthusiasts have only heard about recently, using DVT is not exactly a new idea. Vitalik Buterin, Ethereum’s co-founder, has mentioned the concept since 2021, citing DVT as one of the main priorities for the network in one of his Twitter posts, where he also shared a roadmap of the Ethereum protocol development outlining the platform’s evolution as well as all the important steps for future upgrades. 

According to this roadmap, Ethereum is still in its first era, also known as the Merge, after the overhaul that the network underwent back in 2022. The deployment of DVT will mark the end of this stage in the platforms’ lifecycle after which Ethereum will enter a new era of development. 

At the moment, there are over 600,000 validators tasked with confirming transactions and boosting network security. However, each and every one of these validators can fail at performing their duties. The idea behind DVT is to make validators decentralized and more resilient by changing the way their private keys are managed.

The implementation of distributed validator technology would see private keys that validators use to sign on-chain operations being split between multiple node operators and thus their duties would be shared instead of being individually managed. This would make it much harder for bad actors to get hold of validators’ keys, as they will be stored in multiple computers, while also allowing certain nodes to go offline without affecting the signing process.  

Why Does DVT Matter? 

As with all upgrades so far, Distributed Validator Technology(DVT) also aims at improving specific areas in the network’s functioning, so here’s what’s to be expected of it.  

Decentralization 

It’s a well-known fact that the Ethereum network values decentralization above all else, so having as many independent validators as possible is important for maintaining the platform’s decentralized nature. Unfortunately, the emergence of a few large staking providers that control a large part of the staking operations makes it rather difficult to ensure diversity. 

But with the introduction of DVT the existence of large staking providers would no longer be an issue as the upgrade would ensure staking decentralization by splitting keys across multiple nodes. Under these circumstances, it would be next to impossible to corrupt a validator. In the absence of DVT, the impact of a client bug on the network would be much greater, so the technology could significantly minimize these hazards and enhance the platform’s resilience.    

Avoiding Single Points Of Failure 

While Ethereum is regarded as a strong blockchain platform, the risk of failure still exists. There’s always the possibility of a hardware or software issue affecting the validation process and disrupting operations on the network, which would have extensive ramifications for all users.  

One way to reduce the likelihood of these unpleasant scenarios is to have validators spread across various operators and machines via distributed validator technology. In case one of the machines in a cluster experiences an issue, the remaining parties would be able to ensure that the validator operations are carried out successfully. This would not be possible with single-node validator configurations. 

Enhanced Security

Validators use public/private key pairs to perform operations. Private keys are used to take part in the consensus protocol and verify transactions across the network while withdrawal keys are employed to gain access to their funds. While the latter can be kept safe in cold storage, private keys stay online permanently. As expected, this poses a series of security risks. If a malicious entity gets hold of a validator’s private key, the validator can be penalized or the saker can lose their ETH funds. Fortunately, DVT can help reduce these hazards. 

DVT give stakers the possibility to keep their private keys offline by allowing them to first encrypt the full key and then divide it into various key parts. These parts reside online, being spread out between multiple nodes. As a result, validators can conduct operations in a distributive manner. The use of BLS signatures enables this feature, as validators can recreate the complete key by bringing all the pieces together, just as if they were building a puzzle. Since the original key is not being kept online, the risk of falling into the wrong hands is greatly reduced. 

As with all previous upgrades, DVT also presents potential drawbacks. The introduction of a new component means there’s another part that can experience issues and vulnerabilities. DVT also requires the participation of more nodes in the validation process, which can lead to increased operational costs. In addition, the reliance on a consensus protocol to achieve agreement between nodes might cause latency and thus slow down the network. However, none of these potential issues is serious enough to pose major concerns, so we have all the reasons to believe that when the time comes, distributed validator technology will be implemented successfully.