Advising Obol

Today I am proud to announce that I am joining Obol Network as an advisor, with a focus on incentive design, protocol development, and community. I’ve known Collin Myers for over three years and I am incredibly excited to support him and the team on this breakthrough technology.

Obol Network enables trust minimized staking on Ethereum using Secret Shared Validators (SSV) technology. SSV is a new infrastructure primitive that enables a validator key to be split between independently operating validator instances, enabling Active Active redundancy across Eth2 infrastructure deployments. You can think of this as enabling your validator to operate like a multisig, removing single points of technical failure like downtime and key theft.

Instead, SSV divides a single Ethereum validating key across four or more eth2 beacon node instances that come to consensus to decide on what should be signed by the validator.

Threshold signature schemes are used, which allow for a portion of the instances to be offline (e.g., 2 of 7) creating superior fault tolerance to the validator set-ups used today. With a divided validating key, the entire private key for a validator never exists anywhere.

Obol Network is incredibly exciting for a number of reasons, but the most immediate ones are benefits to stakers. Eth2’s design is forgiving of uncorrelated validator faults, but harshly punishes correlated incidents, such as mass downtime or double-signing. By splitting the key among multiple nodes:

• Downtime becomes less of an issue, as a small number of nodes can have temporary downtime without taking the validator offline
• Double signing is less likely to happen by accident, as an attempted double-signing by one node operator would be rejected by the other nodes before hitting the Ethereum network

To elaborate on that second point, double signings are not always by accident. One of the big risks to PoS networks generally, but also to individual operators on eth2 specifically, is slashing sabotage. An attacker can compromise node infrastructure and force it to go offline or double sign, resulting in harsh punishments, and diminishing the total overall security of the network. This would also increase their (unharmed) stake in the network, making it easier for them to pull off further attacks. Splitting keys among a large number of nodes will require attackers to compromise many more node operators, making it much more difficult to launch an attack.

There is also an additional dark horse potential use case in that Obol Network can enable totally permissionless liquid staking, both on the token holder and operator side. Today’s liquid staking powerhouse is Lido (disclosure: I am an investor) and it has brought immense benefit to the Ethereum community. However, it is limited by the fact that node operator membership must be gatekept as a single operator fault impacts all other Lido validators and stETH token holders. Obol Network will allow all node operators to join in a permissionless way, enabling a much larger pool of validators to support a liquid staking standard. The Obol team recently received a grant from Lido to focus on this work, and my hope is that eventually Lido can transition to an open membership model for operators by using Obol Network.

Lastly, one of the goals of eth2 is to enable as many people as possible to run validators and participate on the network. However, given the 32 ETH staking requirement requires upfront capital of over $100k per validator, there is still room to become more accessible. Obol Network will allow anyone that meets the network’s work requirements to run eth2 infrastructure without needing their own ETH, and earn a portion of the ETH rewards generated by the validators they support. This will enable almost everyone to become a node operator on the network, making eth2 the most decentralized and secure network in the world.

I am incredibly excited to help build Obol as an advisor and suggest everyone follow their progress closely as it’ll move quickly!