Distributed validator technology (DVT) is a way of running a #validator node on a #blockchains network that spreads out the key management and signing responsibilities across multiple parties. This helps to reduce the risk of a single point of failure and increase the security and resiliency of the network.

In a traditional validator setup, a single node is responsible for managing the validator's private key and signing transactions. This means that if the node is compromised, the attacker could gain control of the validator and potentially steal the staked funds.

DVT addresses this security risk by splitting the validator's private key into multiple shares and distributing them to different nodes. To sign a transaction, a majority of the nodes must agree on the signature. This makes it much more difficult for an attacker to compromise the validator, as they would need to gain access to a majority of the shares.

In addition to security, DVT also offers several other benefits, including:

Increased reliability: If one node goes offline, the other nodes can continue to operate the validator.

Reduced costs: DVT can help to reduce the cost of running a validator, as it is not necessary to have a high-powered machine.

Increased participation: DVT can make it easier for more people to participate in #staking , as they do not need to have their own node.

DVT is a promising technology that has the potential to improve the security, reliability, and accessibility of blockchain networks. As the adoption of blockchain technology continues to grow, DVT is likely to become more widely used.

Here are some examples of DVT projects:

Obol is a DVT protocol that allows anyone to run a validator node with a fraction of the resources required for a traditional setup.

Stakefish is a DVT service that provides a turnkey solution for staking ETH.

ZKValidator is a DVT project that uses zk-SNARKs to provide strong security guarantees.

These are just a few examples of the many DVT projects that are currently being developed. As the technology matures, we can expect to see even more DVT projects emerge in the future.

Becoming an Ethereum validator now requires waiting in a queue for approximately 45 days due to high demand and limited availability. Since Ethereum's transition to a Proof-of-Stake consensus algorithm, validators have replaced miners in securing the network. The process of becoming a validator was expected to be simplified: deposit 32 ETH and run the necessary software. However, the queue for validators has grown significantly.

Currently, there are 92,536 validators waiting to enter the network, causing the delay. It seems that the demand for becoming a validator remains high, with very few validators exiting the queue. Only four validators are currently in the exit queue.

Part of the reason for the extended queue is Celsius Network, a cryptocurrency lender. Celsius has been consistently depositing a significant amount of ETH, around $600 million worth, into the staking contract. This ongoing influx of ETH from Celsius contributes to the queue, with approximately 316K ETH added to the validator enter queue at current prices, as reported by Arkham Intelligence.

#ETH #Ethereum #celsius #validator #dyor

Flashbots, a company that provides software for MEV (Maximal Extractable Value), has reported that profits earned through MEV have more than doubled since the FTX crash. The collapse of Silicon Valley Bank (SVB) has significantly boosted the earnings of validators on Ethereum, with the stablecoin USDC’s loss of peg playing a vital role in this increase.

MEV is the profit validators earn by adding or reordering transactions while creating new blocks. Instead of processing transactions in real-time on-chain, validators can prioritize orders with higher fees to earn a profit, similar to traditional market arbitrage.

According to AZCoin News, after the US regulator shut down SVB, the USDC issuer confirmed that it still had $3.3 billion stuck in the bank. The announcement caused panic among users, with many selling or exchanging their USDC, causing the stablecoin to lose its peg.

At that time, market demand for trading increased, and validators had more opportunities to earn MEV profits. On March 11, Flashbots’ MEV-Boost users earned the highest amount of 7,691 ETH, approximately $13 million.

This figure is almost double the previous record high of 3,928 ETH recorded during the FTX incident on November 9. Although these statistics cannot be directly compared, the daily miner’s profit from mev-geth reached an all-time high of 6,397 ETH in June 2021.

This is the profit of running mev-geth compared to a vanilla mempool mining client. To estimate the difference in payment for validators running mev-boost or not, one could examine the value of the mempool builder submitted (0xa1defa) and the winning block.

One interesting thing is that about once a year, there are days with massive amounts of MEV, such as June 5, 2021 (6,397 ETH profit), June 13, 2022 (6,313 ETH profit), and March 11, 2023 (7,691 ETH payment to mev-boost proposers). During such times, competitive MEV markets and OFAs (on-chain flashbots auction) play an essential role in returning value to users.

On March 12th, MEV profits significantly decreased to normal levels with MEV profits on Flashbots at 2,282 ETH. This was due to Circle’s announcement of compensating any shortfall in USDC reserve and the introduction of a new banking partner, Cross River Bank. As a result, the stablecoin was able to regain its 1:1 USD exchange rate and trading demand began to cool down.

Toni Wahrstätter, an Ethereum researcher, expressed his joy that most of the MEV profits went to validators. “They are not the ones running complex algorithms and engaging in insider trading. They just happen to have the opportunity to earn money while securing the Ethereum network,” he said.

In conclusion, MEV has become an important source of income for validators on Ethereum, with Flashbots playing a crucial role in providing software for these profits. While events like the SVB collapse and USDC’s loss of peg have contributed to MEV profits’ recent surge, competitive MEV markets and OFAs are vital for ensuring economic security during massive tail events.

#ETH #Ethereum #MEV #validator #crypto2023

This article was republished from azcoinnews.com