Decentralize Staking for the Future of Ethereum, the Power of DVT | Myra Tumlos - Diva Staking

oh hello I'm just waiting for my screen to come up yes awesome sorry just waiting for my screen to come on for please yes yes cool awesome camera 2 what's up oh hey hello everyone let's get started I'm actually going to talk a little bit fast but I hear you're all used to that so let's go um hello everyone it's nice to meet you and really great to be back here in the great state of Colorado we're here live and obviously in person and the energy in here is honestly insane I said it was great in my speech but it's kind of insane some of us are here meeting our teams for the first time out here right in the front row um some are gathering together once for only a few times that they do per year and some people are ear at here actually to find a new team so if anyone hasn't said it yet I want to welcome you all to my stage today so my name is Myra tumlos and I'm here along I'm here along with some of my brilliant friends from D.A staking has anyone given a round of applause from the stage before no let this be the first I love cheering on my team to give you a little bit of background um on myself I began my journey in crypto back in the beginning of 2020 when the entire world changed I thought the term crypto broke was coined um and commonly used for people who also had Brothers in crypto working at the time who were forcing them to learn about blockchain technology but I found out that everyone was just the crypto bro thems the concept of staking slashing and tokens were introduced very lightly to me in the context of staking eth and earning points or Mochi tokens for making a report online to a bot each day to adopt a habit and complete a goal over the course of eight weeks that concept was very simple stake eth make a report earn tokens each day that you successfully complete all of this and you make that habit stickier the token was also not live yet so the real tagline was fake money real friends um and it was actually one of those incredible friends that led me to Diva in the beginning of 2023 last year which looking back at it now was also towards the end of that bull run this is also my third e Denver woo so exciting um and back then I was hosting a side event when I thought that these conferences were all just a competition for who can throw the best side event and I continued to do that over the course of the next few years in different cities like Miami uh Bitcoin Miami as well as Devcon Bogata until I was introduced to D.A when they launched on test net at the beginning of last year so today I want to share with you how powered by distributed validator technology or DVT as you may have heard it Diva offers the most decentralized and resilient staking solution for ethereum liquid staking today and it's important to remember at moments in time like this when we're well I think we're a little bit outside the bare market now let's call it the cautiously optimistic elephant Market it's important to remember that although new promising resilience Solutions exist now with fun words like immutable spart contract and distributed Tech distributed validator technology there are still centralizing forces that threaten that future of a liquid staking so what I would like to bring to attention today is a topic that's actually not new but if the topic is to new is new to you today good morning wake up um mentioned in the past by shi's Maggie love with alarms recently sounded by ethereum foundations's Danny Ryan and actually vitalic himself the news is very clear there is a present dire need for decentralization at the foundational level of liquid staking and actually decentralization is not only crucial for this future of ethereum it's inherent through its to its ethos so before we can more accurately address the needs of the network we're going to take a look first at the risks that come with staking centralization why it's crucial that we turn our eyes and our energy towards decentralizing now and also how distributed validators or DBT more specifically Diva's DBT provides the current Optimus Prime solution for combating these risks and envisioning that building that brighter future for ethereum so as they say in Colorado gidy up and let's get into it so first let me lay the landscape of current staking trends for you there is no smoke hiding mirrors in the transparency of the blockchain thankfully for us only the top three entities or exchanges currently control over 50% of the liquid staking Network right right now that's Lio finance coinbase and figment as you can see up here on the screen with over half of all of that staked eth um according to this Dune this dashboard that we received from a dune dashboard created by hild dabby which shout out is actually a Community member in Diva so to put this into perspective 26% of all eth that's currently in Supply is staked Lio controls a third of that network with only 37 oper ators 37 um and so while centralized exchanges retain full control over their validators Lio relies on appointed entities so I'm going to go a little bit into that later on now let's take a look at the proof of stake landscape in ethereum specifically first I want to start off with solo stakers uh shout out to solo stakers out there solo Staker visibility if you are out there solo stakers are a little more than just as it's sounds it does include individuals who stake on their own meeting the minimum requirements for ethereum validation duties but that does also include professional stakers or Data Center stakers and then we have a subset of those solo stakers which are called home stakers and they are as you guessed it stake from validate and validate from home solo sakers run their own machines sorry um like this one from our friends at dap node but hopefully the one on top is the near future with either a diva sticker on that daap node or our own na our own native machines solo sakers run their own machines like this one and it requires currently 32 eth which if you look at ethereum today that's over $106,000 to run your own yes shocker but actually it almost used to C it almost costed a thousand e to run your own validator so as I just mentioned it requires running your own hardware and on top of that it also keeps your staked eth locked it is true if you have heard that solo staking currently poses the prime solution for staking since you're running your own validators and you're not relying on centralized pools and you're also adding to the diversity of the ecosystem but I'm sure that some immediate questions come to mind when you think about how there are individuals that really have enough technical background and the means to not run just one validator but also multiple validators so although there is this one side though of Rich getting richer we do need to expand that thought with the perspective that it's actually these individuals that are clearly in it for the long run and for the longevity of ethereum and not just the Quick Cash grab so actually these these people probably also have a lot to share in terms of experience where they've seen uh existing over the course of many cycles that we've seen up to this point today currently solo stakers only make up a very tiny percent percentage though of all stakers and that's only as far as we know or have access to because we don't proper have a proper way of indexing solo stakers at the moment so for being the most current optimal Choice that's live on mainnet that percentage is not nearly high enough in addition to solo stakers entities that you've probably heard more from and are more familiar with are staking with centralized exchanges and what about it unlike solo staking there is no minimum eth requirement to participate however these exchanges um with these exchanges the staked eth is not always liquid so we see this in exchanges like Kraken and coinbase and they also by the way require a 10 to 25% fee centralized exchanges typically operate their own validators and nodes within the proof of stake blockchain Network and these validators are responsible for validating transactions securing the network and earning rewards for carrying out those validation duties and users who stake their assets on these exchanges typically also receive a share of those rewards that are proportional to their contribution of course however while staking centralization offers convenience and accessibility it does come with certain tradeoffs users have to relinquish their control of their assets to to The Exchange which introduces counterparty risks Additionally the exchanges retain full control over the stake tokens and they also May impose fees and other restrictions on the staking process so here we here we go with the final option at the moment liquid staking so liquid staking requires no minimum eth it also includes includes di5 protocols and all staked eth is liquid so some examples that you might know are Lio who I mentioned before and also rocket pool but they also do require a 10 to 14% fee which is also better but not amazing so at the moment more than 50 % of the current ethereum staking power is controlled by an alarming majority as we've seen only the top three pools even further than that 91% of these are permissioned or centralized themselves leaving only 9% I put us at the top though for the decentralized options Like Us in the current available and dominant Solutions trust in the node operators is also required if you have a set of operators as in many of the liquid staking protocols do that assign liquid staking ether to operators who are running the validators these operators have the ability to unilaterally create damage to ethereum they create losses and also transfer damage to the liquid staking token on top of that there are risks that we cannot afford anymore when we leave overwhelming Financial power unchecked centralization then in this way creates a bottleneck that stifles Innovation and then also poses significant risks to the Network's integr Integrity overall and this concentration of power is not just a theoretical risk that I'm talking about here today it's a tangible threat that we've already seen the effects of and by centralizing the staking power we risk everything from single points of failure to potential sensor censorship and manipulation of the network so for example we have collusion and obviously also possible other possible potential for attacks so in these staking Solutions and their challenges what we are seeing here is a Common Thread and the Common Thread is is this compromise that we cannot afford the compromise between accessibility control and decentralization this poses a dangerous Trifecta that we might not have seen coming and it might be too late when we give attention to it in many staking models trust in the node operators is actually just a given but this trust comes comes with a price the risk of unchecked power history shows us time and time again that Financial systems are vulnerable in recent actually in 2022 so that was the during the bare Market we have crypto research analysist Ryan Russ musen at bitwise and in this analysis it was indicated that 46% of ethereum's proof of stake nodes were controlled by just two addresses he noted that this situation is clearly far from the decentralized ideal and especially considering that a significant portion of those blocks around 40% or more of those have been built by two addresses belonging to who Lio and coinbase with coinbase obviously being that centralized service provider such dominance by this few entities in Block production and node operation can be seen as actually antithetical to the principles of decentralization that underpin the ethereum blockchain as a whole and this is just one of many examples we also have another we also have um an article here by vitalic himself where we are seeing the challenges and debates within the ethereum community that are that are pertaining to the broader blockchain ecosystem regarding this balance between efficiency decentralization and then ultimately security so finally this brings us to distributed validator technology which is a groundbreaking approach that reimagines the very fabric of staking DVT distributes a validation process AC Fross an entirely decentralized Network ensuring that no single entity can dominate so this isn't just an improvement it's actually a paradigm shift towards a more transparent transparent secure and Equitable ethereum ecosystem at the moment DVT may seem like this golden egg from Harry Potter and the Goblet of Fire if anyone's seen that movie where it seems like we have gained this egg and pot have the potential to win we're like Harry sitting on the shoulders of our friends friends going you want me to open it and they're screaming yeah but then when he opens it we just hear piercing screams because we have no idea what it's saying or what Secrets it's holding and then all of his friends end up dropping him but spoiler alert he actually just needed to take the egg underwater to hear its Clues and secrets so in terms of DVT um I'm going to open that egg underwater for you today sometimes you need the right environment and the right moment in time to digest something that's so new and somewhat scary but I hope that environment is here at eth Denver and I hope that time is now you can imagine DBT in way more simple terms um as transforming a spotlight into a landscape of stars each point of light contributes to the overall illumination the true benefits however come from the lowered risks of penalties that solo stakers as I mentioned as the current optimal option currently face um they face things due to primarily due to technical issues such as software bugs Hardware malfunction or just power outages all of which can send a node offline but distributed validator technology obviously offers a wondrous solution where operator duties are split but also at Diva we found that that's not all that it needs it needs also to be combined with an economic model that benefits both stakers and operators as well so DBT with Diva actually exemplifies the power of this technology by democratizing the role of validators D.A ensures that anyone can contribute and benefit to the ethereum network at D.A we think everyone should be able to become an operator there's no need for asking the dowo no need to ask anyone because without this it's not a permissionless network and it's not a permissionless token without it it's actually just the service that you're running with with a set of operators providing this service through a smart contract but economically with DBT when you have more people you can take that 32 e that I just told you earlier that takes to run a validator and split that number into basically any number that you want actually if you look at the people right now on the blockchain who have 32 eth and the amount of people that have one e there's actually 12 times more people so with DVT you open the door for more people to start staking and realize the blockchain principles with others currently staking in pools like rocket pool and that are implementing these pools they still require 8 eth plus 2.

4 eth value in RPL tokens so that's 10.4 eth total and expanding this access increases the potential to a large amount of way more operators in the network Diva utilizes redundant clusters containing 16 nodes each they are deterministically coordinating dkg which are distributed which is distributed key generation and they are randomly distributed we have a 2/3 signing threshold and operating on a peer-to-peer Network we actually haven't seen anything like this before that is production ready to go that is for dkg and peer-to-peer where the machines are talking to each other and actually having conversations with each other I'm going to stick on this one for a little bit you can actually of course have multiple machines many to distribute the load across many different entities but most importantly with Diva the collateral who deposits and who controls those nodes is always the operator not a centralized entity So currently in testnet we have operators that can join the network by simply downloading or joining the D.A smart contract anyone can anyone can operate and by registering registering a node and also join as aate Staker so through this integrated technology we can match them together and to do that D.A keeps track of all the operators that have been registered in D.A and all the nodes that have been registered in D.

A and those are the main entities that we have that are going to do the operation of the protocol and of course we also have the stakers the stakers are also being tracked with the balances across dashboards and rewards of course but importantly tracking here is to keep track of all the nodes because we need to we need them later to create validators this model reduces risk associated with centralization fostering a more resilient and inclusive ecosystem so taking a little bit of a closer look the process begins by breaking down the validator responsibilities into manageable and discreet tasks that are essentially fully automated validators as a f a final reminder are initiated every 32 e and these tasks are then distributed among a diverse set of participants within the network and then through Advanced cryptographic Techniques such such as those thresh threshold signatures as well as distributed key generation in addition to Collateral which is also a crucial part of this Pie as well DVT ensures that no single participant has complete over control over the validator actions without going too far into it operators are essentially playing a lottery to run the dkg and one of the unique things about D.A as I mentioned before is this piece of collateral even if you trust the operators in your protocol it can still do anything the randomness then additionally allows a uniform distribution of validators across a network of Diva instead of creating more centralization points so not only is collateral needed to cover these POS possible damages to the operators we actually also need these types of measures to prevent causing damage to the liquid staking token in turn we actually need a a system that's more complex that's easy to adopt and where nodes can concentrate and talk to each other and create that BLS key together and we need something that also works fast we need a system that key where Keys Never Come Together is resilient and also self-healing and is secure and Trust minimized and so this setup significantly reduces the incentive to collude and ultimately reduces any single point of failure or attack all while creating new opportunities so as you can see here D.A actually provides a fully integrated flow of stakers and operators and staking acts as it does similar to other oper other providers where anyone that has an ethereum address can add their ether into the D.A smart contract and join that validating process so very quickly let's take a look at how DVT stands firm up against some of the largest threats to centralization firstly it democratizes the staking process opening up opportunities for that broader participation and reducing the barriers to entry going multi node offers uptime protection increases which increases by orders of magnitude DVT actually additionally gives solo stakers the opportunity to Val to participate in validator clusters which helps level the playing field against those larger entities it also significantly enhances the security and resilience of the network by diverse its validator base oops not only does it make the network more resistant to attacks but it also makes it more adaptable and more robust in the face of challenges because we welcome client diversity so let me just go back here finally moving forward instead of building a middleware on top of the consensus or exe execution clients required to create a validator in traditional staking Diva actually has created its very own native DVT that is much more simple simple to adopt imagine a world where everyone has a node and has a portion of their def defi activity contributing to is securing the network the more participation the more actively we are working towards that decentralization dream and that's also not undermine the role of stakers in this picture we need stakers who can stake their ether and technology in organizations that are more res resilient overall so our mission is clear to steer ethereum towards a future where decentralization is not just a principle but a practice with Technologies like DVT and platforms like D.A we're Paving a way for the network that's more secure accessible and aligned with the ethos of decentralization the future of ethereum liquid staking lies in embracing this shift in moving away from centralization and towards a more distributed Democratic economic model that serves all instead of a tiny population finally this path is not meant to be solitary it's in order for the minority to stand a chance we need to work work together and it requires a collective effort and all of us here in Denver and elsewhere that are continuing to build we are actually emphasizing The Limited potential for the downside and the unlimited potential for the upside so let's go up together thank you thank