What is ssv.network (SSV)?
SSV is the native token of ssv.network, which is a platform that allows developers to build decentralized applications for staking ETH. It employs Secret Shared Validators (SSV) technology to allow an Ethereum validator to operate in a distributed manner. The ssv.network price chart placed above displays the current (and the previous) SSV price. Thus, make sure to check it out.
SSV, also known as Distributed Validator Technology (DVT), splits an Ethereum validator key into four KeyShares. These KeyShare are then distributed to four non-trusting nodes run by operators. A consensus mechanism assigns the nodes with the shared responsibility for carrying out the validator's tasks on the Beacon Chain.
The Istanbul Byzantine Fault Tolerance (IBFT) algorithm serves as the foundation for SSV's consensus layer. How does it work? The algorithm communicates information with the other nodes about a validator node (KeyShare) in charge of a block proposal at random. The block is added to the chain as soon as the predetermined KeyShare threshold certifies it as valid. Besides, since the protocol can quickly replace an offline or malfunctioning node with an active node, validator performance is not affected by that. Thus, SSV nodes do not need to trust one another in order to function.
By merging individual nodes into a strong, decentralized network that can exceed any individual staking service in robustness, uptime, and security, SSV minimizes risk and lowers failure rates.
The ssv.network consists of two layers:
- SSV Peer-to-Peer network layer. It’s the execution layer that operates the validators on the network.
- Ethereum contract layer. It’s especially important for the governance of the project. The contract layer is used for adding new operators, creating new validators, and distributing fees.
The ssv.network crypto project is governed by a decentralized autonomous organization (DAO) called SSV DAO and the holders of SSV tokens. This means that the governance of the project is in the hands of the ssv.network community itself.
The main participants in the ssv.network are:
- Operators. They are responsible for operating SSV node running validators.
- Stakers. By staking SSV tokens, users are able to own validators that are responsible for securing the network and creating new blocks.
- Liquidators. They are responsible for alerting stakers when their balances are insufficient to cover operator fees.
The Purpose of SSV Tokens
Primarily, SSV tokens are used for governance. This is the case because only SSV token holders are able to participate in the decision-making processes on the SSV DAO.
However, the ssv.network coins also serve as a reciprocal incentive system between operators and validators. For maintaining their validators and producing ETH rewards on their behalf, operators earn SSV tokens from stakers, while stakers pay operators with SSV tokens and obtain ETH payouts directly from the blockchain.
If you intend to purchase ssv.network tokens, be aware that the SSV price is subject to fluctuation. This moslty happens as a result of the volatility of the entire crypto market having an impact on the ssv.network price, just like it does on the pricing of other crypto assets.