Analysis of ETH 2.0 Pledge project SSV (with detailed pledge tutorial)

Eth2.0 Dark Horse SSV Value Analysis, Airdrop Wool Course

Original author: 0x26DA

This article is a long one and I hope to stay patient as it requires a lot of technical process and is expected to be available to very few people. According to the few people may be big hair theorem, do not lose.

***** supplement, preceding & NBSP; ETH2.0 website pledge, LIDO and RPL project content is not airdropped. The SSV participates in the SSV test network as a verifier or operator. GoETH test coins were used.   If it is not the real ETH, do not pledge the real ETH

Eth has been the leader of the public chain after the breakout of defI bull market since 2020.   After several rounds of bull-bear conversion, consensus was gathered, and after defI outbreak, ecology was consolidated. Later, it was hard for the public chain to catch up. At present, the only criticism is that low TPS leads to slow speed and high gas.   This is also the other various public chain has been hoping to seize the breakthrough, said they TPS high ah.   ETH2.0, led by V, addresses this last weakness.

Eth2.0 has 64 shards, which is equivalent to 64 chains. ETH chain TPS increases by *64 times. And from the current POW to POS, POS does not need to waste computing power in finding random numbers, and it is not difficult to improve performance by 15 times than POW. So when ETH2 is fully operational, TPS will be over 1000 times faster than ETH1 is expected to be today, and that's just the speed increase on the 1-layer chain, not including the 2-layer rollup expansion.   Which public chain will be faster and better than ETH?

The final vulnerability is resolved, leaving ETH unchallenged as the future financial settlement infrastructure of the world. This is the basis for ETH's future market value to surpass BTC.   Eg. So it seems. ETH2.0 online to the public chain and ecological projects, including speculation investors are a major event.

POS chains need to pledge ETH coins as nodes in order to participate in consensus and block production and reap rewards. ETH2 requires each verified node to pledge 32ETH, which is currently valued at $120,000. Close to 100 wr. With such a high investment, you have to install your own operation and maintenance nodes, which must always be online. It is difficult for ordinary households to participate in the ETH2 node. Are the nodes all controlled by the big holders? ? Just like all other POS can't be as highly decentralized as POW chain (BTC,ETH1).   Wait and see, this ETH2.0 pledge platform ecological project will also have a great or even key impact.

Eth2.0 has pledged a total of 8.8 million ETH and 10 million eth to produce about 570,000 Beth per year. At its current price of 3,800 U, the ETH2.0 pledge track generates $2.2 billion a year. If the VALUE of ETH increases or the amount of pledge increases, the total income will increase accordingly. Eth Pledge will be a track with steady high yield and continuous cash flow.   Since it is difficult for small retail investors to personally participate in official pledge, ETH2 development teams do not have many ETH participating nodes, and they cannot verify block nodes by the project side like other POS chains, so the verification nodes of ETH2.0 are left to the market.

At present, CEX, a centralized trading platform, occupies the majority of the pledges in the market, while Kraken, Binance, Coinbase and other major CEX.   There is also a (semi-) decentralized pledge service provider (platform), representative   Lido (LDO), Rocket Pool (RPL), SSV, etc. Here different service providers mainly make completely different solutions for different pledge pain points.   With CEX pledges like Binance, users simply transfer their coins to CEX, and all they have to do is hand it over to the exchange and wait for interest to collect. It's like a coin stir-fry depositing money with Binance, giving ceX access and control. All rely on the other side of the character of a high degree of trust, in case of small trading platform run to zero.   Another (semi-) decentralized pledge platform, where users recharge 32ETH into smart contracts deployed by the other party. Details below.

The interests of ETH2.0 pledgor are divided into withdrawal private key and authentication private key

As the picture above shows,   ETH2.0 divides the rights and interests of the pledged user into two private keys, the withdrawal private key and the verification signature private key.   The withdrawal private key is used to extract 32ETH of reward income and pledge. After creating the wallet, the user can store the withdrawal private key offline, and then take it out to sign and get money when he needs to withdraw ETH.   The authentication private key is used by the ETH2.0 node to sign each block of data. The authentication private key must be signed online at all times or the node will not work properly. Under normal circumstances, the authentication private key must be given to ETH2 to verify the node operation and maintenance operator, otherwise the node operator cannot keep the node working properly. Every time a node goes offline, it will be punished, and the fine will be deducted from the 32ETH pledged.

Let's compare the detailed operation steps of each pledge service provider one by one to analyze the similarities and differences:

I. ETH2.0 official Pledge:

1, & have spent First we need to install the node that creates ETH1, because ETH2 contains ETH1,   There are many tutorials on the web, and I'll link to them later. You can build it in Infura and copy the API (endpoint) of the ETH1 node.

2,  To set up an ETH2 node, buy a cloud server first.

Go to ETH2 official recommended node programprysmaticlabs.comOfficial website, run the command to install

d:mkdir prysm & & cd prysmcurl https://raw.githubusercontent.com/prysmaticlabs/prysm/master/prysm.bat --output prysm.bat 

Bat, connect to the ETH1 API, run the node, and synchronize data.

ETH2 node program Prysm

3, open ETH2 beacon chain pledge official website & NBSP;prater.launchpad.ethereum.org

Point become a validator, & NBSP; Go on/accept. On the next page, after installing node PRYSM guide, select several nodes to pledge, each node corresponding to 32ETH,

Enter the number of nodes n, corresponding to   n*32ETH

Download the wallet to generate a local tool and certificate of deposit keystore,

Pledgor & have spent ETH2 official wallet generation tool

Back up your wallet keys (mnemonics) and proof of deposit.

4, upload the certificate of deposit keystore (which contains the private key for verifying the node signature)

Upload the keystore

The next step is to link wallet MetaMask to complete the pledge of 32*N ETH.

5. Import the certificate of deposit into prysm. bat.

ETH official pledge process diagram

We see that the official pledge is probably the process as shown in the figure above. In this process, 32ETH should be prepared first, which is currently worth $120,000. They also need to buy and configure cloud servers, install and maintain ETH1 nodes and ETH2 nodes by themselves, and keep online work for a long time without interruption. If they are offline, they will be fined. The bar for participating in the pledge is very high.

Second, & have spent Lido, a mortgage service

Lido mainly solves the pain point that ETH is locked and cannot be used again, and releases the liquidity of ETH locked and pledged. Lido has pledged 1.66 million ETH, far more than any other service provider. Business volume TVL is currently the leading pledge track.   Let's open Lido official website to pledge.stake.lido.fi

LIDO official website pledge operation interface

Interface is very simple, 0.01 ETH can be pledged. Display gains the same amount of 0.01stETH.   Click confirm after connecting wallet metamask signature transfer 0.01 ETH to pledge,

When we open the lido pledge of transfer hash to look at: https://etherscan.io/tx/0x547aaee952c042387f4fb42e8b600450dd083c350be599b5b5aa795a7440cc41

Lido pledge process in EtherScan records

This transaction transferred 10ETH into lido's stETH contract, and the contract returned automatically. 10stETH Give pledge address.   The process is similar to the very familiar one, you top up 10ETH into unisWAP pool and uni contract automatically returns LP uni-V2 which records how much ETH equity you top up.

Lido solves two pledge pain points.   One is that the user does not need 32ETH. Starting from 0.01 ETH, the user can pledge any number of ETH and obtain benefits.   The second is that the pledged ETH is locked without liquidity, and LIDO hairstyle stETH is used to release liquidity instead of ETH.   In particular, the PLEDGED ETH and earnings can only be extracted through BETH of the beacon chain. Currently, the ETH2.0 beacon chain cannot be transferred, and the pledged ETH and earnings are locked and unavailable.

The stETH returned by Lido can now be exchanged for ETH at almost 1:1. The pledgee can get back ETH at any time by selling stETH to unlock liquidity. How did Lido do that?   Because pledge ETH get stETH,  StETH /ETH group LP to curve mining & NBSP; It can produce CRV and LDO with very high yield. So institutions and big players are happy to provide liquidity to stETH. The LDO currency holder and the project party undertook the EXCAVATED LDO and made great contribution to the increase of the pledge amount of ETH2.0.

How to operate and maintain lido ETH2 node? We can see that LIDO's official website only has pledge, without the function of generating key and backup, and without the guidance of downloading and installing ETH node.   According to the reply of the official TG, pledge users do not need to care about the problems of nodes.   Lido will operate and maintain a batch of nodes by itself, and most of them will be outsourced by node operators.

Therefore, the withdrawal private key of all nodes should be saved by LIDO official backup.   The outsourced node should always give the signature verification private key to the node operation and maintenance operator, otherwise the node cannot sign each block.   This kind of node management is actually similar to Binance. This is because the platform owns the withdrawal private key and signature private key for all nodes. At the same time, node o&M personnel also have the signature private key. Similar to the same wallet private key & NBSP; Both of them.

Iii. Pledge Service Provider RPL:

Open RPL official website pledge experience & NBSP;stake.rocketpool.net  :

RPL official website pledge operation interface

The interface is also very simple, 0.01ETH can also pledge, pledge 1ETH returns 0.98rETH,

RPL has been leading the ETH2.0 pledge track anticipation in 2020, but of course 2020 ETH2.0 is not live yet and has not started pledging yet.

etherscan.io/tx/0x1038cea00447c4d1666f6da13e9cc2514caa19ed51d483d2cca56a8274f91c02

RPL Hash record of the pledge process

Look at the RPL pledge interface and hash record to understand,   It's basically the same way as Lido. Amount of pledge, & NBSP; Click start, link metamask buckle eth pledge. Also return rETH.   But rETH is far less mobile than stETH.

At present, the pledge amount of RPL is 37,500 ETH, far lower than liDO's 1.6 million ETH.   RPL also does ETH2 authentication node management function, general idea & NBSP; It is the node operator who pledges half of 16eth, and then 16eth from the RPL pledge pool to make a node with 32ETH.   That is to do RPL node operator must bring 16ETH pledge to each node.   This makes the operator a stakeholder, but greatly improves the operator's door bar. The detailed operation steps need to be further studied (too busy recently).

Four, & have spent Decentralized pledge platform SSV, the protagonist of this paper:

Open the official website & NBSP;ssv.networkIt's very informative.

ssv.network/tech/  It has a detailed explanation of SSV technology.

Click Stake to enter pledge page & NBSP;app.prater.ssv.network/validator, & have spent We found that there is no function for entering ETH quantity to start pledging.

SSV official website pledge interface

Instead, choose to join the SSV network as a verifier or node operator (operator).

Step by step, set up the ETH1 node and ETH2 node through the SSV network and then run them.   Because there are airdrops and many technical operations involved in THE SSV test network, few people are expected to participate.

First, we need to purchase cloud server AWS to ensure that SSV clients can work continuously.

The SSV websiteInstallation Help DocumentsVery detailed & have spent :

1, & have spent Install SSV, command line

wget-q-O$HOME/install.shhttps://raw.githubusercontent.com/bloxapp/ssv/main/install.sh

2, & have spent Generate the key, this is the key of the SSV operator,

/go/bin/ssvnode generate-operator-keys& & docker logs ssv_node_op_key --follow \

& & docker stop ssv_node_op_key & & docker rm ssv_node_op_key

In the result, the top part of the public key is public, and the back part of the private key should be properly backed up.

3. Establish ETH1 node and ETH2 node, because the pledged authentication key is not imported into prYSM node, but into SSV network.   So we can build ETH1 and ETH2 nodes on Infura.

Copy the endpoints (apis) of the backup ETH1 and ETH2 nodes.

4. Configure the SSV and import the APIS of ETH1 and ETH2 nodes and the SSV private key.

yq n db.Path "$SSV_DB" | tee $SSV_DB/config.yaml \

5, run   SSV client

SSV: docker run -d --restart unless-stopped --name=ssv_node -e \

6, open  SSV websiteRegister as operator (Operator)

Join SSV operators

Connect to the Metamask wallet and fill out the operator form with the public key generated above.

Registration SSV Operator form

Submit, connect to metamask wallet for signature confirmation. Now you're an SSV operator.

7, open ETH2 official pledge page & NBSP;prater.launchpad.ethereum.org

In the next step, do not install PRYSM because it is installed in Infura. Enter the amount pledged, generate a wallet, back up the mnemonic (private key pledged), and save the certificate of deposit. In & have spent /root/eth2deposit-cli-256ea21-linux-amd64/validator_keys

Upload certificate of deposit keystore.json, connect metamask wallet to transfer N *32ETH pledge (currently goETH of test network).

8, go back to SSV official website to join the verifier & NBSP;app.prater.ssv.network/validator

Join SSV verifier

Import deposit certificate, interface with  launchpad.ethereum.org  Officially, it's basically the same

Import deposit certificate of pledge ETH

The prompt became:   Rest assured there is no record of your keys anywhere. Your validator key is secured - it "s not stored anywhere and never sent to our servers. I uploaded this deposit certificate keystore  Contains the signature private key of the ETH2 authentication node, enter the password of the set keystore.

9. Next, select four operators. Has been & have spent The next step & have spent Go to Metamask for signature confirmation.   Come to an end.

We can see that SSV did not split the function of 32ETH to make small pledge, nor did it issue derivative TokenrETH sETH to release liquidity locked by pledge. It's a pledge against ETH2. Split the authentication private key. Improved the management mode of ETH2.0 nodes. Completely different direction from Lido and RPL.

Let's review the similarities and differences between SSV pledge and other methods (including ETH2 official pledge) :

Contrast SSV  ETH official and other platform node management mode

ETH2.0 official pledge & NBSP; It is the pledgor that imports the 32ETH certificate of deposit (signature private key) into the eth2 node for the node to sign each block. The pledgor can be an individual or a service provider. . The pledgor controls two private keys and operates and maintains the node by himself.

Collateral platform, Binance, Kraken, coinbase  And Lido, the RPL project side, are the platform holding the withdrawal private key and signature private key of all ETH2 authentication nodes on the platform. The complete signature private key is then shared with the operator of the o&M node. Therefore, the operator of the node also has the signature private key of the node.

Once you hand over the private key, you can never get it back, just like you give someone your wallet private key. The 2 private keys pledged are generated before the pledge can not be changed. And the node does not stop the withdrawal private key can not be pledged in advance of 32ETH. Current pledge platforms, Binance, Kraken, coinbase  And LIdo, RPL project side are using ETH2 official pledge and node, they are equivalent to the control of pledge and ownership of the node to run the node for the person.

SSV splits the signature private key into 4 (or N), and each shard private key is given to a node operator (the service provider of the operation and maintenance node).   All node operators do not have a complete signature private key and become pure workers, who earn wages for the pledgor to operate and maintain nodes without controlling nodes.   The pledgor controls the withdrawal private key and signature private key. Withdrawals are always saved offline, and SSV management signature private key can also be saved offline for more security.   The pledgor holds the signature private key without handing it over to the operator. Therefore, the pledgor always maintains the control right of pledge and the ownership of nodes.

The SSV can address the following risks associated with the pledge of ETH2.0 nodes.   First of all, the node must be always online, so when upgrading and maintaining the node, there will be the risk of being fined offline, and the fine will be deducted from the 32ETH mortgage. You can't use a backup node during an upgrade because ETH2 does not allow the same certificate of deposit to run on two nodes and is fined as well.

ETH official website warns that you cannot add the signature private key to multiple authentication nodes

There are also many risks: such as giving the complete signature private key to the operator, the risk of exposing the private key, the risk of the operator doing evil, the risk of the node server down, the risk of being hacked and so on. All of these risks are at the expense of the mortgagor's 32ETH.

It is not clear from the above that the SSV sharded the signature private key to four operators, which is beneficial to either party:

1, & have spent Mortgagor: after paying 32ETH, own full control & NBSP; The withdrawal private key and signature private key can be saved offline.   Let 4 operators operate and maintain the nodes, and no one operator can be so bad as to fine 32ETH pledged,

2, & have spent ETH2 public chain: the upgrade and maintenance of ETH2 nodes are easier. One operator can stop the node upgrade at any time without affecting the other three operators to continue their work. The upgrade can be completed in 4 turns.   It helps to make ETH2.0 more decentralized and resist the risk of single point of outage. Because a single operator offline does not affect node signature verification.   The operator of the node can't use the node without a signed private key to do evil.

ETH2 pledge platforms (service providers), such as Binance, Kraken, coinbase  And lido, RPL projects, etc.   These platforms pledge a lot of ETH. Although ETH belongs to each user, the two private keys of the node are platform managed. At most, they operate and maintain only a few nodes by themselves, while most nodes are outsourced to service providers specialized in operating and maintaining ETH2 nodes.

Are they willing to give away their entire signed private key? Is the coin trader willing to share the private key of his wallet with others?   If the SSV solution is available, they will most likely choose SSV. You can save two private keys offline. Without sharing the signature private key, the signature private key is fragmented to different operators. Let them do nothing but work hard to maintain the nodes.

4, & have spent Node operators and o&M personnel can easily upgrade and maintain nodes through SSV.   The anti-risk capability of nodes is greatly improved. For example, the risk of exposing the complete private key, the risk of node server downtime and offline risk, the risk of hacker attack, the risk of node upgrade and maintenance offline risk.

It can be seen from the above that SSV technology is beneficial to almost all pledge stakeholders.   SSV technology can be extended to other POS public chains once it is stable on ETH2.0.

SSV technology was originally conceived by ETH Foundation and ETH2 development team. It was probably too time-consuming. - ETH2 team is not developinghttps://notes.ethereum.org/@adiasg/preventing-eth2-validator-failure#Proposals-for-SSV-protocols  Look at this paper, the author tweeted. @CarlBeek  And @ adiasg  All are ETH2.0 developers.

A few days ago from the ETH core developers of ethereum FoundationTim Beiko, but alsoJoined SSV DAO Treasury multi sign manager. It can be seen that ethereum Foundation has been strongly supporting SSV project.

In October 2021, at ETH Lisbon Consensus conference, SSV project partners, Coinbase and DCG, the parent company of Grayscale, discussed the video of pledge and SSV at a roundtable: &NBsp;www.youtube.com/watch?v=DPWc3Y7GeK4 is also taking ETH2.0 pledge privacy sharing verification technology very seriously.

BLOX team developing SSV project & NBSP; SSV development will begin in early 2020. It has gone through three generations of test networks. It was tested over a year.   If there are any more in the future. To develop a potential competitor to SSV, just wait for him to test the line and see how it works.   Because the test at least 1 years to ensure safety, the test network effect is good to consider again.

The CDT the Blox team worked on was a data analytics business that wasn't recognized by the market. Let's do SSV instead.   The new product does not abandon CTD holders, all ssVtokens are converted from CDT100:1. Most teams will issue new coins if they start a new project, and the old coins will die.

SSVS totaled 10 million, and they were all in circulation a few years ago.   The new investment institutions will be added in 3 batches at the average market price, with a total of up to 3 million SSVS to be issued to each major institution.  At presentThe first institutionsIncluding Coinbase, Grayscale parent DCG, LUKKA, etc., with an average cost of 6.3U.  

Second group of institutionsAverage cost price & NBSP; 12.37 UThey haven't announced which ones yet.

The third batch hasn't started yet.

Last month vgod announced the ETH2.0 roadmap.https://twitter.com/VitalikButerin/status/1466411377107558402

The top C bit of V god's ETH2 map is DV

V Distributed Validators, eth2 validation nodes & NBSP Demonstration and deployment, & NBSP; Placed in the top middle position, it can be seen that V God attaches great importance to the ETH2.0 node decentralized verification block.   SSV is the best and most secure authentication signature technology available. There's no reason not to be taken seriously by the ETH2 development team.

https://twitter.com/ssv_network/status/1466621609196732419  SSV official said THAT DVT aka SSV, DVT alias J called SSV, honored V God put SSV on the top position of the line map.

Currently, RPL has started to integrate SSV technology for the management of pledged private keys, and LIDO Huobi Coinbase Okex has invested in SSV. Binance, Kraken, coinbase  And lido, RPL project, etc., all migrate pledge to SSV network management node not hard to imagine.

Coinbase  Mara Schmiedt wrote earlier last year. Detailed explanation of SSV (DVT) technology principle:

https://medium.com/coinmonks/eth2-secret-shared-validators-85824df8cbc0

Finally, let's take a look at the market value of the pledge track:

Lido pledged 1.66 million ETH, TVL carrier class 6.3 billion U. It also has the highest market capitalisation. Coingecko checks 1 billion total, circulation 300 million, market price 3.3U,  Total market capitalization of 3.3 billion, market capitalization of 1 billion in circulation. Compared with LDO's huge 6.3 billion TVL, the market value of 1 billion is too low. The potential is huge. Ldo also expanded to solona, Matic, FTM and other public chains.

RPL has pledged about 40,000 ETH, a total of 18 million. 16 million in circulation.   Market price: 45,The total market value is 800 million U, and the current market value is 720 million UKeep to the rules.   But RPL only went online last month, so it still has potential.

SSV is still a test network at present. According to the value of SSV technology to ETH pledge, the future can be expected.  The total amount is 10 million, fully in circulation, the market price is 9U, and the total market value is 90 million U in full circulation.  After the currency exchange, it will be divided into 3 batches and each batch will be issued no more than 1 million SSV to investment institutions. The unsold amount will be cancelled and no additional issuance will be made.coinbase  Gray cost 6.3U, the second batch of institutions cost 12.6U  , & have spent The dark horse with the most potential and the least market value.

In addition, you can take a look at how technology bull Lu Distant analysis of SSV.  https://www.tuoluo.cn/article/detail-10069767.html

I don't know if THAT's clear, but you can follow it on Twitter.@ivanstarbb, & have spent We'll find some time to study it later.

It is not difficult to imagine that SSV will be personal pledge-service providers, node operators, CEX pledge-NBSP. That neither side can refuse. May become a critical requirement for ETH2 pledge node management. If half of 10 million ETH pledge is moved to SSV network, it will be the first huge TVL in history.

After reading the article, some people think that SSV becomes the basic component of ETH2.0, so SSVToken is no longer needed. In fact, it is very difficult to make MPC management of open nodes.

This has theAn articleTo explain some MPC operations, renBTC is a number of mappings. One of the tokens with the highest degree of decentralization. ren  For so many years, I have been trying to make the original BTC capital pool into a node group using MPC to manage private keys. So far, it is still an internal encircled node, and I dare not or do not want to open the door bar to join the node. It can be seen that it is very difficult to truly join the MPC management private key of the node without a gate bar. For example, if you have several hundred million dollars in your wallet, you need to divide the wallet private key into six parts and give them to people you don't know. If four of the six people work together to restore the complete private key, you can transfer all the money. And you don't know who they are, and you're the one who's liable for hundreds of millions of dollars. Would you like to? Are you confident that your MPC won't have problems with multiple signings? Ren does not open the node indicates that there is no secure MPC management private key.

SSV to MPC management, the verifier settlement to the operator to use SSVToken to pay the cost of computing power, operators also pledge SSV coins to ensure that they will not do evil. Well captured the value of the SSV protocol. ETH2.0 pledge to use SSV network requires SSVToken, can not bypass SSV coins.   Only this project has produced products so far. The other SSV competitors are in the early stages of financing. Pre-development takes one year, and the testnet test product takes at least another year. It's gonna be at least two years before we have a decent product. We are two years behind schedule. You're not ready to do it now and you're not ready to do it later.

SSV, the MPC technology, will be extended to other POS chains after it matures. Other chains also need better security pledges and better management of nodes. BSC, SOL, AVAX, FTM, etc.

Another potential expansion is across the chain.   V God even yesterdayThe textIt says there's not enough security across the chain.https://www.geekmeta.com/article/4145463.html

It indicates that cross-chain does not have high security at present. As mentioned in the previous article, the core security problem of cross-chain, especially cross-BTC chain, is the private key management of the original BTC capital pool. How to securely distribute public administrative private keys?   Because this private key has total control over all users' vast assets. SSV can make the MPC management private key, which is equivalent to solving the core problem of the cross chain. The future entry into the cross-chain field is also a shoplift.

SSV officially claims that SSV is the layer of ETH2.0. 0 layer. Such an important base technology, in a big game with good cash flow, and very good value capture capability. Pledgers need to pay SSV coins to calculate power, and operators also need to pledge SSV coins to prevent evil. There is no pure DAO governing Token.   An expectation of 10 billion gross market cap (1000U /SSV) is not excessive. That is, if you get the day the SSV mainnet goes live. The main network is officially expected to launch in Q2 this year.

Can't operate really luk wool, buy also not lose money. At present, 10,000 U can buy 1,000 SSVS in Binance. Even if air coins return to zero, the loss is only 1W, and the risk of return to zero is very small. But with expected returns high this year, the risk is high.

There will be heavyweight WEB3 research reports in the future, so stay tuned to Twitter.

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