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Lido Finance Implemented Simple Distributed Validator Technology (DVT)

Reported by The Defiant, Ethereum staking protocol Lido Finance has implemented technology designed to boost the diversity and number of node operators on the Ethereum blockchain.

Six months after the Lido Decentralized Autonomous Organization (DAO)’s approval of the Simple Distributed Validator Technology (DVT) module, the infrastructure has been established to welcome the involvement of community members in staking, including solo stakers.

This matters because DVT should help ease concern that Lido is concentrating too much staked ETH by diversifying node operators. Lido has 29% of staked ETH, according to data from Dune Analytics.

This development enables the first cluster of Obol Cohort 1 to begin receiving Ethereum deposits.

Obol Cohort 1 refers to the first group or batch of clusters participating in the Obol Network. The Obol Network is part of the broader Ethereum staking ecosystem and employs DVT to increase the decentralization and security of Ethereum staking operations.

“Clusters” are groups of validator nodes that work together to perform Ethereum consensus duties in a decentralized and trust-minimized manner.

A way to better understand DTV is to imagine that you and a group of four friends decide to keep a treasure safe, DragonStake, a staking-as-a-service provider explains in a blog post.

“Instead of trusting one person to hold onto the key, each person holds a piece of it,” the post says. “To open the treasure chest, a majority of the group must come together. This is somewhat how DVT works.”

The post further explains DVT’s function, stating that “DVT allows not just one, but multiple operators (our friends in the analogy) to manage a validator. This means if one operator has a problem, the others can keep things running smoothly, making the whole system more resilient and secure.

For Simple DVT, as the name defines the goal is to make this advanced technology accessible and ‘simple’ to more people.

Simple DVT simplifies the method in which validation responsibilities are divided among various operators.

“By using DVT, the Lido platform aims to spread out the responsibility of validating transactions over a broader set of operators. This not only makes the process more secure by reducing the risk of failure but also makes the system more democratic and less centralized. Simple DVT is particularly exciting because it’s a step towards using this technology on a larger scale in the Ethereum,” the blog post added.

Moving forward, Lido Finance said that the community can anticipate the release of the initial performance report for Obol Cluster 1, additional cluster integrations, and a DAO proposal to initiate SSV Network participants on the mainnet.

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