The core mission of SSV.network is to offer a decentralized and secure alternative to existing Ethereum staking solutions. The SSV DAO is being created for the sole purpose of decentralizing ownership of SSV.network. SSV is the token used for governing the SSV.network protocol and treasury.
SSV.network is an open source, community driven protocol which allows for trustless distribution of an Ethereum validator between independent staking operators. SSV.network and DAO are a response to existing staking solution configuration limitations. As of today, ETH staking is concentrated in the hands of a limited number of service providers and validator clients. SSV will allow for simple access to a variety of staking operators resulting in improved security, fault tolerance, and validator performance for all stakers.
Why a DAO?
Decentralized governance is a natural extension of a decentralized protocol. SSV will introduce a more secure and decentralized infrastructure for ETH staking. The protocol will permit any person or entity to become an operator and receive fees for running validators on behalf of stakers. In order for the protocol to remain agnostic, decision making should be assigned to token holders who have the ecosystem’s interests at heart. A DAO:
- Is the optimal way to coordinate between independent parties in the ecosystem.
- Allows the ecosystem to openly vote and discuss protocol and network decisions.
- Fairly sets network fees (the portion of operator income collected by the DAO treasury).
- Fairly decides on treasury use and allocation.
The only path forward for ETH staking is decentralization with zero usability compromises. SSV technology in combination with strong community governance offers exactly that.
The Role and Responsibilities of a DAO Member
DAO members define initial parameters of SSV DAO and propose and vote for new initiatives, protocol changes, fees, and treasury related decisions:
- Setting and adjusting protocol fees – setting the % amount of fees the DAO will be entitled to receive.
- Operator assessment committee – ranking each operator according to predetermined guidelines.
- Operator supervision – voting negligent operators out of the network.
- Treasury decisions – DAO use of accumulated fees, grants, and investments inflows.
- Roadmap and protocol improvement related decisions.
DAO – Native Token Symbiotics
SSV DAO is a for profit DAO. It’s main goal is to increase the amount of assets held by the DAO treasury. SSV token will comprise the majority of the DAO’s treasury. The more ETH staked using SSV.network, the more income in the form of SSV token will be generated by the DAO. In order for the DAO to maximize income, members will need to contribute to:
- Protocol development and decisions.
- Determining protocol fees.
- Supervising operator activity.
- Assisting with growing the ecosystem (ETH at stake, operators, DAO members).
The native token treasury can be used for further growth of the protocol and ecosystem:
- Grants for protocol development and network growth.
- Revenue share directly to SSV token holders.
- Marketing and community incevitization.
- Token swaps for treasury diversification.
- Investments by strategic partners in exchange for SSV tokens.
Operator Risk and Assessment Committee
One of the main pillars of SSV.network is its operators. Operators are in charge of managing stakers’ validators and attesting and proposing on their behalf. As SSV aspires to offer a safe and more decentralized alternative to existing staking solutions, it is important to have as many operators as possible across varied clients, regions, and cloud services.
An SSV.network user will have the option to choose between many different staking service providers (operators) and allocating their staking duties to 3rd parties in a distributed fashion. Sorting between many different providers and pricing points will be a challenge for the average user.
We propose a DAO based assessment committee which will rank the different operators according to a pre-agreed upon framework. The committee’s main responsibilities will be:
- Determine a framework upon which operators will be ranked
- Rank new operators with a 1-10 score according to a preconceived risk assessment framework.
- Ongoing review of operators in the network, timely ranking reassessment.
- Rejecting ‘high-risk’ operators in order to protect protocol users.
- Forcing malicious/negligent operators to exit the network (i.e operators which do not perform their duties or have low performance over time).
The parameters which the committee can use in order to assess an operator could be as follows:
- Validator client
- Beacon node (self hosted or 3rd party)
- Non SSV ETH at stake (scale) and track record, were they slashed in the past
- SSV network ETH at stake
- Collateral, amount of SSV holdings against SSV.network staked ETH
- Diversification, how many client, regions, cloud services does an operator support
Operators are free to join the network as well, newly joined operators will have a score of ‘0’ and will need to apply to the risk committee for an assessment or the DAO can decide to engage in an assessment on its own accord.
Committee members will be compensated from the DAO treasury for completing their duties as their efforts have a positive impact on the ecosystem. An assessor’s role is sensitive and the network has to ensure their neutrality and judgement. As such, they will be required to post an SSV collateral and be rewarded according to the quality of their work:
- An assessor can apply for assisting a project and offer their analysis based on the risk framework.
- Committee members can approve/reject the assessment.
- Assessors which completed an assessment successfully will be eligible to receive SSV compensation from the DAO treasury.
- Rejected/failed assessments will result in a penalty to the assessor’s collateral.
- Voting on assessments will result in smaller monetary compensation for the majority vote and zero impact on collateral for the minority vote.