For EthStaker’s 31st edition of their Community Call series, Rémy Roy and crew hosted the SafeStake team, engaging in productive dialogue and asking questions about our infrastructure, ecosystem, and protocol. EthStaker’s mission is to provide information and resources to ETH Stakers who want to know about new developments in the ecosystem.
During the call, Marco, Chris, and Dmytro presented the many benefits of employing SafeStake’s DVT technology to expand Ethereum’s validator base for greater decentralization and censorship resistance. They also answered questions from the EthStaker panel and community, further solidifying SafeStake as a major player in the DVT space.
If you missed the exciting call between EthStaker and SafeStake, we have broken it down into a summary that we will present in two issues.
Now, let’s take a look at the first part of the EthStaker/SafeStake community call:
EthStaker: What’s your solution and how can this help everyone?
SafeStake: Our platform is called Safestake, a staking solution for Ethereum that utilizes Distributed Validator Technology (DVT). This cutting-edge technology splits a validator key into shares, allowing the validator to run on multiple nodes, promoting decentralization and ensuring security and fault tolerance. Our platform is committed to keeping validators online and helping to decentralize the Ethereum ecosystem, which we believe is the mission of all current DVT solutions.
EthStaker: Is SafeStake a direct competitor to Obol and SSV?
SafeStake: We would rather say that Obol, SSV, and SafeStake are all major contributors in the distributed validator technology (DVT) space. The ETH staking market is large enough that we don’t have to be direct competitors. It directly benefits decentralization to have multiple players contributing to DVT.
https://daniejjimenez.medium.com/the-dvt-landscape-a-solution-provider-comparison-29507cfdfccb
EthStaker: Are they roughly equivalent technologies or do they serve different purposes?
SafeStake: Yes and no. You are familiar with Obol and SSV and we are all building similar DVT technology. However, we are the first to implement this technology using Rust. As an infrastructure, we understand that diversity is essential, which is why Ethereum needs multiple implementations of DVT with varying technologies that provide different benefits. Therefore, we aim to provide the first Rust implementation for the distributed validator technology (DVT) ecosystem.
[Chris explained how the technology works, pointing out the four operator construct.]
EthStaker: Are these four operators on a separate network so that they can coordinate their work?
SafeStake: SafeStake features a permissionless in/out operator system where the only thing they need to know is the public key and IP of the other operators on the network. These four different nodes can fulfill some handshake criteria and form an operator committee.
EthStaker: So these operators that are working in synergy, do they have to be in coordination with each other? Does it have to be on a separate network so that they can sign their messages together?
SafeStake: We have developed a logistics smart contract that is responsible for handling the registration of both operators and validators on the network, so no separate network is needed. Whenever a new validator joins the SafeStake network, it delegates its validation tasks to the operator committee (four operators they choose) during the validator import. The four operators involved will perform a handshake and run the MPC and Threshold Signing Scheme using the HotStuff consensus protocol, then start aggregating messages and proposing blocks to the Beacon Chain.
https://daniejjimenez.medium.com/the-dvt-landscape-a-solution-provider-comparison-29507cfdfccb
EthStaker: This is not only a DVT solution… it also has a Liquid Staking Protocol as well, right?
SafeStake: That’s correct, it’s a combo that will be released in Stage 2. The staking threshold will be lowered to 8 ETH via an ‘Initiator’ deposit, and the balance 24 ETH will come from the liquid staking pool deposited by retailed stakers with minimum 0.01 ETH. Retailed stakers will also receive a LSD token (sfETH) representing their share in the liquid staking pool.
EthStaker: The $STATE token will have this Liquid Staking value where people will be able to reuse that token for DeFi and other things?
SafeStake: Not exactly. The $STATE token (currently rebranded as DVT token) is the payment token from validators to operators on the SafeStake network. It also serves a governance function, allowing holders to vote on governance proposals.
As validators come on board, they do not have to run any hardware. Instead, they can simply deposit their ETH on the beacon chain and delegate their validator tasks to the selected operator committee who bears the responsibility of running the hardware. The subscription fee in $STATE is the source of earnings for operators on the network.
So in Stage 2, when liquid staking is introduced, users will receive a liquid staking token (sfETH) in return for their ETH deposit. Therefore, the $STATE token is completely separated from liquid staking.
EthStaker: Is the ‘four operator’ number flexible or is it always going to be four operators?
SafeStake: Technically it can be flexible to increase the number of nodes involves. However, we need to balance the tradeoff between more secure and more cost effective in a production environment. For example, when the Op committee composes 16 nodes, the Byzantine fault tolerance rate is about 31% (5/16*100%), while the Byzantine fault tolerance rate is 25% among the 4-node Op committee. But the hardware cost and network communication cost of the 16-node Op committee wil be exponentially increased. That’s why we use the 4-node Op committee setting. Compared with the solo node staker architect, it already improves the performance robustness 100% indeed.
[Chris went on to explain the process of how things work in Stage 2, where ‘Initiator’ operators will make an 8 ETH deposit to create a ‘mini-pool.’]
EthStaker: This begs the obvious question: you’re using the word ‘mini-pool’ which is a Rocket Pool-ism. Are your smart contracts developed from scratch and are they open source? Where did these contracts come from? Tell us a little bit about that and about the audits.
SafeStake: We have designed the entire tech stack for the mini-pools from the ground up. In fact, the smart contract is not the most important component; the DKG (Distributed Key Generation) is the most crucial part. When the initiator activates the mini-pool, they will select other members to form a committee and initiate the DKG protocol, generating a key pair securely that can never be recreated by any single entity.
https://daniejjimenez.medium.com/the-dvt-landscape-a-solution-provider-comparison-29507cfdfccb
We feel that’s a key difference between SafeStake and others in the space, like SSV and Obol.
While we appreciate the insights shared by these peer organizations, we have initiated innovation from the ground up. We have realized that the current RocketPool protocols rely on an Oracle to control the mini-pool assets. It is not an idealistic design although the Oracle is managed by a DAO. In our architecture, we have an innovative design from the ground up that is to run the DKG scheme from the very beginning during the Op committee setup, which ensures neither a single party can control the mini-pool assets. This implementation also eliminates the need for an oracle.
EthStaker: can you talk about the smart contract upgrades? Who controls those smart contracts and are they immutable? Are they upgradable? And if they’re upgradable, who controls upgrades?
SafeStake: If you are referring to the ability to upgrade the mini-pool smart contract, we have established that there will be an admin role to control the upgrades, but we will limit it with the parameter control for security.
EthStaker: How are smart contract upgrades controlled on a technical level? Is that a multi-sig? Is it a DAO? How do you have that controlled?
SafeStake: Currently, we do not have plans to establish a DAO to upgrade the smart contract. However, we may consider introducing a DAO in the future. Right now, our main focus is perfecting the DKG scheme to create the mini-pools and enable liquid staking on top.
EthStaker: What I’m hearing is that the team can make a unilateral decision to upgrade the pool contracts, but that is subject to revision. Is that right?
SafeStake: At this moment, the core team has control over the smart contract upgrades, but with limited authorization. We need to and are in the process of specifying a parameter.
EthStaker: Let me pivot for a second and ask you a couple questions around decentralization. So you’re saying SafeStake is a middle layer and we’ve heard that from Obol as well and we work with Lighthouse. What does your roadmap look like to support all existing clients?
SafeStake: That’s a good question indeed, but to be honest we are not a big team at the moment with less than 20 core devs, so that’s why we are focusing on delivering the first Rust implementation using Lighthouse. If everything runs well, we will expand our support to other consensus clients.
About ParaState
Parastate is participating in ETH 2.0 PoS with a new tech stack called SafeStake, a trust-minimized middle layer that promotes decentralized ETH 2.0 staking. SafeStake is the first Ethereum liquid staking pool protocol written in Rust that implements distributed validator technology (DVT). It utilizes HotStuff consensus, BLS Threshold Signature architecture, and protocol-level DKG to provide robust security and reliability, so validators can maximize their ETH staking rewards.
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