The SSV Network protocol embarks on its biggest and most ambitious milestone to date. SSV2.0 will profoundly change the restaking market and give rise to the Based Economy, unifying Ethereum and unlocking new sources of yield for validators. This is a possible future envisioned by SSV Labs and presented to the SSV Network DAO.

This blog post will provide a high-level overview of everything SSV2.0 encompasses, why it’s essential, and the need to drive the 'based movement'. Read the whitepaper for an exhaustive look into SSV2.0.

TL;DR

SSV2.0 is a revolutionary bootstrapping model that unlocks new opportunities for validators by bootstrapping off-chain services called "based applications" (bApps). SSV 2.0 enables validators to do more and earn more by extending their security to all applications — creating a new asset class: the Validator.

This blog post will cover the following:

• Unlocking Yield with bApps Infrastructure introduces bApps, the bootstrapping problem, and the based economy.

• bApps: Extending Ethereum’s Security to ALL Applications demonstrates how bApps use Ethereum validators to secure any application with minimal risk in a more capital-efficient way.

• Joining the Based Movement underscores the based economy and use cases for bApps.

• The Risk Expressive Model details how the bApp framework adapts to risk tolerance.

• The Based Applications Chain shows how the SSV Network goes multi-chain, enabling scalable, cross-chain interoperability for bApps.

• Multidimensional SSV Tokenomics elaborates on SSV staking, fees, and upgraded tokenomics for the SSV token.

• The Roadmap shows tentative timelines for the SSV2.0 launch.

Unlocking Yield with Based Applications Infrastructure

SSV2.0 presents a new way for validators to gain more by doing more. By utilizing the validator as an asset class, SSV2.0 unlocks a new kind of decentralized application - the based application (bApp). A bApp is any service or application that leverages Ethereum validators for their security, decentralization, and inherent Sybil resistance.

Developers can use bApps for various use cases, including based rollups, co-processors, oracles, bridges, and more. The next section discusses use cases in more depth. They can also serve novel applications like pre-confirmations and base-sequencing. By allowing SSV validators to tap into new opportunities, bApps can increase validator yield while helping to secure themselves with no additional risk to the validator or Ethereum itself.

With SSV2.0 the SSV Network will evolve from a DVT infrastructure for re/staking applications to a based infrastructure, securing all applications directly with the Ethereum validator set.

The Bootstrapping Problem

There are currently two options to bootstrap off-chain services. Firstly, developers can self-bootstrap, which is resource intensive, complex, and can initially face centralization problems. The second option is restaking. In restaking existing stakers from one PoS system, such as Ethereum, reuse their staked assets to secure additional applications. Restaking is a simpler option than self-bootstrapping. Yet, it still has downsides like yielding withdrawal credentials, cascading risks, and high bootstrap costs.

A bApp harnesses Ethereum's validator set for enhanced security, scalability, and operational resilience. Instead of requiring their own validator networks or capital, bApps rely on Ethereum’s existing infrastructure, enabling them to seamlessly establish trust and maintain decentralization.

The Based Economy

As the bee arises with the flower, so does the based ecosystem with bApps. In a zero-sum game, one participant's gain directly corresponds to another's loss. This creates a competitive dynamic where participants must redistribute resources instead of expanding them. In contrast, an infinite-sum game fosters collaboration and growth, allowing participants to create additional value collectively.

When applied to the bootstrapping of security in a decentralized ecosystem. The infinite-sum approach transforms competition for resources into a synergistic environment where new applications, services, and participants increase the overall value of the platform. However, the current restaking framework often operates as a zero-sum game. Restakers face capital allocation constraints, where supporting a new service typically means reducing their commitment to existing ones. This dynamic stifles the growth of new services and applications as they struggle to gain the necessary initial capital to bootstrap effectively.

Infinite-sum games promote exponential growth. Each new validator increases security for bApps and each new bApp provides new opportunities for validators. By transitioning to an infinite-sum model—where validators and services collaborate to create shared value, the ecosystem can break free from limitations. This enables seamless bootstrapping, incentivizing innovation, and builds a more secure and infinitely scalable based economy.

bApps: Extending Ethereum’s Security to ALL Applications

Enhanced Security Through the Ethereum validator set

Ethereum's validator set represents a highly secure and decentralized network of stakers. Each validator deposits 32 ETH as collateral to ensure financial alignment and network integrity. This capital serves as a Sybil-resistant backbone, making Ethereum validators uniquely trustworthy for additional applications beyond securing Ethereum Layer 1. By reutilizing the validator set’s inherent trustworthiness, bApps gain robust security without requiring their own validator networks. This offers smaller or emerging decentralized systems a way to bootstrap with Ethereum’s proven PoS network.

Withdrawal vs. Validation keys for Bootstrapping services

Slashable vs. Non-slashable Assets

Both types of assets play a role in strengthening a system's security by increasing the effort and resources needed to attack and corrupt it. For a deeper dive, check out the whitepaper.

• Slashable Assets: These can be penalized if duties aren’t performed or for harmful behavior, helping to secure the system.

• Non-slashable Assets: These aren’t penalized but still add to the system's overall protection.

Bootstrapping models, such as restaking, rely mainly on slashable assets to bootstrap applications. In native restaking, all capital is potentially slashable. In EigenLayer specifically, slashable assets are delegated to chosen AVSs. A portion of those assets are used as non-slashable assets across multiple services, spreading the risk and thus potentially mitigating the chance of slashing affecting all staked assets. Other restaking protocols will potentially adopt a similar outlook on using these types of assets.

On the other hand, bApps utilize the validation keys (not the withdrawal keys) of Ethereum validators, leaving the staked 32 ETH untouched and withdrawal keys secure with their owners. Validators can participate in multiple bApps, earning additional rewards without risking their principal, thereby creating a larger base of non-slashable assets for the bApps they opt into.

Slashable assets - in the form of ERC-20 tokens and native ETH, of course - can be delegated to an operator to provide bApps with additional security. Each asset type possesses distinct security properties and, as such, may play different roles in a bApps design and operation.

Formalizing Security

Based applications (bApps) formalize security by leveraging Ethereum validators' sybil resistance without risking their staked ETH. Validators simply need to prove their status on the Beacon Chain to secure bApps, avoiding slashing risks while maintaining flexibility in defining security parameters. This approach reduces costs and risks associated with traditional restaking models, offering higher Cost-to-Attack (CtA) and a more stable, predictable pathway for securing protocols. bApps enable validators to diversify participation and amplify rewards without the volatility and financial burden of locked slashable capital, fostering a more efficient and resilient ecosystem.

Capital requirements: bApps Vs. Restaking

Ethereum Aligned

SSV2.0 aligns with Ethereum by ensuring the validator is always safe and preventing any cascading risk to Ethereum from slashing. In actuality, bApps protect validators from such penalties, fostering a safer and more inclusive environment. bApps allow validators to increase rewards by securing multiple protocols without additional risk or infrastructure costs, making increased yield more accessible to solo stakers and small-scale operators.

Ethereum aligned bootstrapping

Permissionless protocols like Lido, Rocketpool, and Ether.fi could empower operators to boost their gains by supporting bApps, enhancing the decentralization and network resilience of bApps. This model transforms Ethereum's staking landscape by democratizing gains, reducing risk, and ensuring future growth and development.

bApps vs. Restaking

Joining The Based Movement

As deeply elaborated in a previous post about the growth of the Based movement, it becomes apparent that SSV2.0 fills an essential gap in the current based ecosystem. The start of the based movement represents a critical shift in the Ethereum ecosystem, addressing fragmentation issues introduced by siloed rollups and sidecars like MEV. By anchoring applications and services directly to Ethereum’s Layer 1 (L1) validator set, the based movement ensures interoperability and composability, all while leveraging Ethereum's inherent decentralization and security.

Technologies like base-sequencing and pre-confirmations enable based transaction ordering and faster confirmations, creating a seamless user experience without sacrificing Ethereum's network effects. This shift is vital for bootstrapping new applications and services, as it reduces complexity, eliminates the need for multiple sidecars, and fosters a more inclusive ecosystem for developers, validators, and users.

SSV2.0, as a based applications protocol, can take this vision further, providing a shared, credibly neutral platform that directly connects Ethereum’s validator set to all applications - and even other L1s, as discussed in the Based-Applications Chain section. A bApp protocol allows validators to support essential validator commitments and sequencing while also enabling frictionless bootstrapping for new projects.

Use Cases

Risk Expressive Model

Restaking models rely on unique slashable capital, creating a zero-sum dynamic where supporting new apps and out-of-protocol services reduces the capacity for others. On the other hand, the Risk Expressive Model (REM) in the bApp framework allows operators to allocate risk dynamically across multiple bApps. The model incentivizes responsible behavior while maintaining fairness by tying operator influence to their assumed obligations and using a scoring mechanism to adjust weight based on risk.

This means that bApps can tailor their risk tolerance using configurable values, enabling smaller bApps to attract operators with lower risk requirements and larger ones to enforce stricter standards. This adaptive approach ensures efficient capital allocation, balanced security, and long-term network stability.

Based-Applications Chain

The Based-Applications Chain (AKA _b_Apps chain) is the first bApp scheduled to go live as part of the phased SSV2.0 launch. The bApps chain is an “App chain” that will encompass existing DVT contracts and operations currently on SSV Network, as well as new bApp operations and features. There are 4 main reasons for designing it as an App Chain:

• Scale: Ethereum’s calldata limitations restrict efficient operations for data-heavy DVT and bApps. The bApps Chain enables high-volume transactions with persistence, overcoming these constraints.

• Cost: Gas fees on Ethereum make DVT operations expensive. A dedicated bApps chain significantly reduces transaction costs, benefiting developers and users.

• Lightweight Design: The bApps chain uses light clients for efficient participation, minimizing storage and processing requirements. This lowers barriers for bApp developers and operators to join the network.

• Multi-Chain Compatibility: A credibly neutral coordination layer can integrate with multiple L1 blockchains, removing chain-specific dependencies and promoting a decentralized, interoperable ecosystem.

Yes, you heard right—SSV Network is going multichain! This is an incredibly important point that needs to be emphasized.

bApps secured by Ethereum and other PoS blockchains

A dedicated, credibly neutral coordination layer enables validators from various Layer 1 (L1) blockchains to participate without being tied to any specific chain. By welcoming validators from different blockchain networks, the chain eliminates the need for complex cross-chain dependencies and creates a truly decentralized environment. This neutrality simplifies onboarding and significantly enhances the security of bApps by pooling diverse and robust validator sets. As more L1 validators join, the chain achieves greater resilience, higher cost-to-attack thresholds, and a broader base of trust. This means validators from any PoS chain, including Cosmos, Solana, and others, can secure bApps.

Multidimensional SSV Tokenomics

Transforming the SSV Network from a DVT-powered staking infrastructure into a multidimensional network for the based ecosystem will necessitate an evolution of SSV tokenomics. New mechanisms will be considered by the SSV Network DAO to endeavor not to inflate the SSV token supply.

SSV Staking

SSV staking is central to securing the "Based Applications Chain" (bApps chain). As done with the Ethereum blockchain and others, and in order to guarantee the integrity of the bApps chain, SSV tokens will be staked, exclusively, as a slashable commitment for validators. As discussed above the Risk Expressive model will be used to manage each operator’s voting weight and rewards (according to the number of validators, staked SSV, and obligation ratios) and slashing conditions.

This means users can stake any amount of SSV tokens exclusively as a slashable commitment to validators. Misbehaviors will result in penalties in SSV. For more information on slashable and non-slashable commitments, refer to the whitepaper.

Fees

Fees accumulated will be distributed to each node operator based on its obligation to the bApp. Operators can set a percentage of the rewards to be distributed to accounts that delegate validators and/or SSV Tokens to them. The operators keep the remaining part of the rewards as operator fees.

SSV2.0 Fee structure

SSV2.0 introduces a three-dimensional fee structure to support staking and based application (bApp) participation. Fees are categorized into:

F1 (L1 Staking), a fixed network fee per validator set at 1% of Ethereum APR;

F2 (bApp Participation), additional fees for each bApp "opt-in";

F3 (Transaction Fees), which vary based on transaction congestion on the bApp chain.

Operators either receive or burn all collected fees as rewards, aligning incentives and ensuring sustainable network operations. The next section discusses the burning mechanism.

Deflationary SSV

Minting

The minting of every SSV token is controlled solely by the SSV DAO’s Multisig committee and is subject to approval by the SSV DAO. Currently, a substantial part of the minting of SSV comes from the Incentivized Mainnet(IM) program, which, since October 2023, has minted more than 600.000 SSV. The IM program is scheduled to end on December 31st, 2025

Burning

The protocol burns a portion of the collected fees based on the amount of SSV staked. The burning rate increases as users stake more tokens, reducing the circulating supply.

Deflationary Tokenomics

Due to decreasing minting and increasing burning from staking, SSV’s inflation will reduce over time. In an aggressive scenario, the network may become deflationary as early as 2027, with deflation expected in 2028 or 2029 in more conservative projections. See the whitepaper for calculations.

Potential SSV token total inflation, including burning (requires DAO approvement)

Roadmap

The SSV2.0 launch will follow a phased approach, with each step providing a crucial building block for the next. The roadmap below shows the tentative timelines for the main components of the launch.

A Based Future Awaits

Extending Ethereum and all other PoS blockchains’ security and functionality to bApps creates an ‘infinite-sum game’ where all participants benefit from a growing ecosystem. The SSV DAO and the SSV ecosystem as a whole are gearing up for a Based Future. Are you ready?

Disclaimer: The above represents a vision for the future of SSV Network and is subject to approval by the SSV DAO.

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