SSV Network is a fully decentralized, open-source ETH staking network, based on Secret Shared Validator (SSV) technology. ^[1][2]

Overview

SSV is also known as DVT (Distributed Validator Technology), as it provides an infrastructure solution for decentralizing Ethereum validators by distributing their operation to the multiple non-trusting nodes of the network. Running an Ethereum validator on ssv.network achieves active-active redundancy, introduces new levels of validator key security, and benefits the Ethereum network, staking pools, staking services, and solo stakers. ^[3]

SSV is a sophisticated multi-signature wallet with a consensus layer. It is a middle layer between a beacon node and a validator client. From a user’s perspective, it is just a component to plug in and take care of everything on their behalf. ^[1][2][3]

The main components of an SSV configuration are as follows:

Distributed Key Generation

This process generates a shared public and private key set calculated by the operators running an SSV instance. Each operator owns a single portion of the private key, ensuring that no single operator can affect or have control over the entire private key and make unilateral decisions. ^[4]

Shamir Secret Sharing

This mechanism is used to reconstruct a validator key using a pre-defined threshold of KeyShares. Individual KeyShares cannot be used to sign a duty, yet not all are needed if some are faulty as described by n≥3f+1. SSV.network can leverage the BLS signatures - allowing for multiple signatures to be combined to recreate a validator key signature. By combining Shamir and BLS - the keys are 'broken down' to share and regrouped whenever a duty is assigned. ^[4]

Multi-Party Computation

Applying secure Multi-Party Computation (MPC) to secret sharing allows the KeyShares of an SSV to be distributed amongst operators securely as well as performing decentralized computation of validator duties without reconstructing the validator key on a single device. ^[4]

Istanbul Byzantine Fault Tolerance Consensus

Conclusively, the consensus layer of SSV is based on the Istanbul Byzantine Fault Tolerance (IBFT) algorithm. The algorithm randomly selects a validator node (KeyShare) responsible for block proposal and sharing the information with the other participants. Once the predefined threshold of KeyShares deems the block to be valid, it is added to the chain. As such, consensus can be reached even if some operators (up to the threshold) are faulty or not currently online. ^[4]

Network

The ssv.network ecosystem is composed of 3 types of actors: stakers, operators, and DAO members. ^[1]

Stakers

These are services or individual ETH holders that leverage SSV/DVT technology for optimal liveness, security, and decentralization of their validator(s). Stakers pay a fee in SSV tokens to operators for managing their validator(s). ^[5]

Operators

Operators provide the hardware infrastructure, run the SSV protocol, and are responsible for maintaining validators and the overall health of ssv.network. Operators determine their fees for services in SSV tokens and charge stakers for operating and maintaining their validator(s). ^[5]

DAO

The ssv.network DAO decentralizes ownership and governance of the ssv.network protocol and treasury, with SSV being the native token of the network. DAO exercises its mandate by two main mechanisms, executing governance functions and executing snapshot proposals passed by the token holders. ^[5]

SSV Token

Secret Shared Validator ($SSV) is the native token of ssv.network. ^[6][8]

The token main use cases are payments and governance.

• Payments - serve as a way for stakers to compensate operators for managing their validators
• Governance - a way to participate in ssv.network related decision-making and treasury allocations.

$SSV plays a pivotal role in the network’s ability to harness a community and motivate stakeholders to meaningfully contribute to the network. ^[7]

Tokenomics

Stakers using ssv.network pay operators and network fees using $SSV. Each participating operator can determine its own price point and compete with other network operators. Fundamentally, the more ETH is staked in the network, the more fees will be paid to operators and the DAO’s treasury. The DAO can use its treasury for promoting the network’s growth and development efforts thus creating a positive cycle of ETH inflows and $SSV revenue. ^[7]

$SSV is designed to exponentially progress the network's core values: Decentralized DAO governance, DAO treasury, and Operator income. ^[7]

Governance

The ssv.network DAO is the driving force behind decentralizing ownership and governance of the ssv.network protocol and treasury. The protocol’s native SSV token allows anyone who holds it to participate by using it for DAO votes, proposals, and other items that require a vote. ^[9]

The ssv.network DAO exercises its mandate by two main mechanisms. The first is by executing governance functions controlled by the governance multi-sig. The second is by executing snapshot proposals passed by the token holders. Execution is accomplished by various appointees and working groups inside the DAO. ^[9]