The number of projects registering massive growth and all-time highs in 2023 continues to grow. The latest token to join this coveted club of gainers is SSV, the native cryptocurrency of the SSV.Network. This relatively unheard-of token has rocketed nearly 340 percent since the start of the year. It has even registered an all-time high of $49.15 on February 28 and recently broke into the top 100 cryptocurrencies by market cap. But what is the SSV.Network and why is its native token reaching for the moon? Tag along to find out.
What is the SSV.Network?
Before we get into the SSV.Network, we must understand the issues with staking directly on Ethereum. To begin with, there’s the entry barrier; stakers need to lock up a minimum of 32ETH to begin staking. Moreover, they also need to set up and run a validator node, which is a technical and time-consuming process. Even if the staker does possess the technical expertise to set up the node, they need to ensure they are online constantly and sign transactions every 6.4 minutes to receive their staking rewards. If the validator node is offline, they may miss out on the staking reward, or worse still, see some of their staked ETH slashed as a penalty.
The SSV.Network provides a solution to these issues. It offers staking pools that are driven by its unique Distributed Validator Technology (DVT). This system splits the duties of the validator between several distributed nodes. The validator node is split into “KeyShares”. These KeyShares are then distributed to no fewer than 4 distributed nodes. This ensures great participation and lower downtime. There is no hassle of setting up a validator node, allowing more people to participate in Ethereum’s consensus mechanisms. Moreover, even if one of the KeyShares goes offline, the others will continue carrying out the duties of the validator node.
This ensures greater decentralisation of the validation process. More participants also ensure greater fault tolerance. This means that rogue or faulty nodes will have little or no effect on the validation process. Further, it greatly reduces the chances of a 51 percent attack as miscreants would have to control a very large number of KeyShares to influence the network. It also reduces the chance of lost staking rewards or staked ETH being slashed. This is why reason DVT technology was proposed and endorsed by Ethereum co-founder Vitalik Buterin when he explained the Ethereum 2.0 design. This Distributed Validator Technology used by the network is also known as Secret Shared Validators, or SSV, which is how the network gets its name.
Now, the entire SSV.Network depends on 3 main participants to make things work. The first is the operator. This entity is responsible for running the KeyShares of the validator nodes and carrying out various duties of Ethereum’s PoS consensus mechanism. These operators fix an annual fee for their services.
The next entity is the staker. These individuals earn rewards by locking up their ETH with the operators. Each staker needs to select at least 4 operators they wish to endorse. The stakers then provide their KeyShares to the operators, who then carry out the validation process. In exchange for their services, stakers need to pay the operators their stipulated fees. Finally, there are DAO members who vote on network proposals and decide the future of the network.
This is where SSV comes in. It is the native cryptocurrency of the network and is used to pay operator fees. SSV holders can also participate in the DAO; the number of tokens they possess will decide the weightage of their votes on the various network proposals. Finally, the network also charges operators and stakers a certain fee for its services, which is again paid in SSV.
Why is SSV rallying?
There are several reasons for SSV’s recent price spike. To begin with, Ethereum’s Shanghai Update is fast approaching, which is driving the popularity and usage of staking services. Therefore, going forward, SSV could provide back-end services to these staking platforms, helping them decentralise and optimise their validation processes.
Further, in anticipation of the Shanghai Update and the future utility of DVT, the SSV DAO has also set up a $50 investment fund on Jan 19. This fund will provide support for upcoming projects that are building distributed validator systems. The fund has seen contributions for several noteworthy investors, including Digital Currency Group, Coinbase Ventures, Everstake, and GSR, to name a few.
The project was also the official sponsor of the recently held ETH Denver Hackathon 2023, where the SSV team handed out grants to projects developing DVT systems. As such, ETH Denver provided the SSV.Network a significant amount of exposure and visibility.
The future outlook for SSV also looks good as more investors are expected to begin ETH staking once the Shanghai Update is released. The token’s moving averages also point towards a “strong buy” which could indicate further gains in the coming days and weeks.
Conclusion
The SSV.Network could usher in a new era for ETH staking in the coming weeks and months. Its novel approach to running a validator node is garnering significant attention from the cryptoverse and is driving the price of the SSV token to new heights. At the time of writing, the token was changing hands at $43.53 per unit. This represents a 33.20 percent increase over the last 7 days and a 335 percent growth spurt since the start of 2023. Given its unique service offering and bullish technical indicators, SSV could also be in for additional gains in the near future.
However, cryptocurrencies are highly volatile. Their prices can fluctuate wildly in minutes, moving against the even strongest indicators. Therefore, it is important to do your own research and invest only as much as you can afford to lose completely.
(Edited by : Anushka Sharma)
