In a recent article, we noted that last December, Vitalik Buterin presented three proposals for the future of Ethereum staking in a post published on ethresear.ch titled Sticking to 8192 signatures per slot post-SSF. 

As part of this post, Vitalik stated that he advocates for the use of distributed validator technology (DVT) and DVT-based staking pools to help solve the issues of centralization and inequality that are present in the current staking ecosystem. 

In this article, we will explore the implications that these proposals have for Ethereum and how SafeStake’s unique implementation of DVT fits perfectly into Buterin’s vision. 

But, before we proceed, let’s take a moment to discuss the role transactions play in Ethereum and what the SSF (single slot finality) proposal entails.

Transactions and finality

Transaction finality on Ethereum at the user level is simple and straightforward: a transaction cannot be reversed or altered. This means that the Ethereum blockchain is immutable. 

Transaction finality occurs when more than two-thirds of the votes of the entire group of validators are gathered, allowing transactions to be finalized and permanently recorded on the blockchain, guaranteeing their immutability.

This consensus mechanism secures Ethereum and allows the chain to guarantee that a block cannot be modified or removed from the chain without burning at least 33% of the total amount of ETH staked, or around $22.4 billion.

Since this massive figure serves as an excellent deterrent to malicious behavior that could modify or remove previous blocks on the chain, the roadmap presented by Ethereum developers four (4) years ago to achieve a foundational shift towards single-slot finality (SSF) was the result of many months of extensive research to increase efficiency without sacrificing security.

Now, let’s take a quick walk through the process of how Ethereum utilizes a series of checkpoints to process transactions and finalize on-chain data.

With an LMD GHOST + Casper FFG consensus mechanism that combines traditional BFT consensus with a blockchain-based consensus, Ethereum has thousands of certs voting on the head of the blockchain, in parallel, in each slot.

Validator committee votes occur three (3) times in the block in the first slot of each epoch (32 slots per epoch or ~6.4 minutes) being the checkpoints.

After two (2) epochs, the Casper FFG finality algorithm finalizes the block. It is at this point that the economic cost to reverse the block would require burning the deposit balance of at least one-third of all Ethereum validators, or ~$22.4 billion.

Now, the selection of the last block on the Beacon Chain is executed according to the first vote of the validator committee in the most recent time slot block. Here, the LMD GHOST algorithm is utilized, resulting in the most extended chain rule in a more secure way.

Next, the second vote of the committee uses the Casper FFG algorithm and consists of voting on the checkpoints of the periods that were used to test and finalize the on-chain information.

Finally, the Crosslink Vote connects the shard chain to the Beacon Chain where all voting information will be written to the attestation.

Implementing SSF

As we have seen in the process outlined above, transaction finality in Ethereum under the two-epoch scheme is a complex process that involves a large number of validators (currently ~1M) handling thousands of signatures on a p2p subnetwork.

With single slot finality, Ethereum may only be able to support a theoretical maximum validator count smaller than the status quo. And, as Vitalik points out, if this number is lower than the number who want to participate, how will it be determined who stays and who goes?

Beyond the user experience (~15 minutes on average to obtain a definitive resolution), single slot finality (SSF) requires an understanding and tweaking of complex factors to ensure that the confirmation time is ideal and the system does not lose its operational efficiency.

Therefore, implementing SSF is a considerable technical challenge due to the large number of signatures that need to be processed and the complicated certification propagation mechanisms and signature aggregation system.

However, as outlined by Buterin in his post, the current problems Ethereum faces due to using a hybrid consensus mechanism, like MEV reorganizations, interaction errors, and a less-than-optimal user experience, are more than sufficient reasons to advance toward single-slot finality.

Challenges to SSF

It is essential to understand that the significant bottleneck in implementing SSF relates to signature aggregation, which challenges validator nodes, even though BLS signature aggregation has recently been made highly scalable.

The real problem lies in the increased burden resulting from increasing the number of validators per subnetwork within the attestation block voting scheme we explained earlier in the article. Here, it is assumed that two (2) signatures per participating validator per slot would be needed, resulting in a huge amount of signatures given the current number of Ethereum validators (~1.75 million signatures).

This is why Buterin has insisted, from the very beginning of his proposal, that validation subcommittees, or supercommittees, should be the future mechanism, as they would mitigate these signature complexity and scalability limitations. It is here that he proposes increasing the minimum ETH deposit size for validators to 4096 ETH and limiting the maximum number of validators to 4096 to improve overall efficiency and user experience without sacrificing security. In this scenario, only a maximum of 8,192 signatures would need to be aggregated and processed, significantly decreasing the time to finality.

That’s right… in an unanticipated and genius move, to reduce the computational burden on the network and simplify the consensus mechanism, Buterin proposes a significant increase to the validator minimum deposit and a significant reduction in the maximum number of validators!

To many, this idea may seem counterintuitive to decentralization (after all, wouldn’t these changes actually centralize the network even more?). However, after exploring them further, we believe the proposed changes would result in a simplified consensus mechanism, improved security, and encourage more user participation. 

DVT-based staking pools

What is even more interesting and exciting for us here at SafeStake is Buterin going all-in on decentralized staking pools as the main method to achieve these goals. Yep, that’s right… It appears that DVT-based staking pools will likely be the future of Ethereum staking itself, and of course, this is the perfect segue into SafeStake.

DVT-based staking pools offer more egalitarian staking, and here, SafeStake emerges as a shining star, empowering solo and retail stakers to participate in running pooled distributed validators with a low 4 ETH staking minimum for solo and retail stakers (SafeStake Stage 2) and 0.1 ETH for retail stakers (SafeStake Stage 3). 

Additionally, staking services can utilize SafeStake as an added layer of decentralization without any additional programming, coding, or APIs. Node operators can run their nodes on both the staking network and SafeStake simultaneously to take advantage of DVT quickly and easily.

SafeStake was written to be a turnkey DVT staking solution for everyone, allowing solo, retail, and institutional stakers to earn maximum staking rewards without worrying about the challenges and risks of running their own validator nodes.

The immediate benefits to using SafeStake are:

Lastly, as Buterin keenly points out, this scheme would encourage competition from the various DVT protocols to offer the best staking experience. Wait, is that a challenge? SafeStake is more than ready to compete!

Final words

Single slot finality (SSF) and the reasons Buterin proposes to justify increasing the minimum deposit for validators and decreasing the total number of validators (both to 4096) may be difficult to understand for many Ethereum users. However, when explained and taken in context, his ideas may seem more appropriate and reasonable to achieve the right balance of efficiency, decentralization, and security.

The complexity of the signature aggregation process in both the current and post-SSF versions of Ethereum is undoubtedly a crucial point to consider in the road to its mass adoption.

As a DVT-based protocol and ardent believers in the importance of decentralization, we agree with Vitalik that large, pooled, distributed validators are the key to encouraging more people to participate in Ethereum staking while simultaneously enhancing the overall efficiency and security of the network.

About SafeStake

SafeStake is a decentralized and pioneering technology company focused on revolutionizing Ethereum staking. With its cutting-edge Distributed Validator Technology (DVT), SafeStake provides an ultra-secure, fault-tolerant environment for Ethereum validators to maximize staking rewards and minimize penalties. SafeStake is committed to driving the growth, innovation, and decentralization of the Ethereum network while ensuring the security and prosperity of its participants.

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