By George Ward
SSV.network, a developer of validator infrastructure, has created an ecosystem funding initiative. This fund aims to help Ethereum with its decentralization efforts and improve Ethereum staking.
DVT To Revolutionize Ethereum Staking
The company announced on Tuesday that it had created a $50 million ecosystem fund. This fund will support projects utilizing distributed validator technology (DVT) to build applications.
In addition, this fund will help platforms in Ethereum seeking to achieve their decentralization objectives over the long term. The DVT protocol is an open-source technology that enables the distribution of a validator’s responsibilities among several nodes.
Notably, this protocol played a crucial role in Vitalik Buterin’s plan for Ethereum 2.0. This is because a higher degree of DVT implementation leads to greater decentralization.
Further, SSV said several VC giants had promoted Ethereum’s DVT usage. They include SevenX, GSR, HashKey, Everstake, NGC, and Digital Currency Group.
According to SSV, it has kept about $3 million for developer grants. Also, it has allocated $1.2 million to about 20 PoS projects like Moonstake, Blockscape, and ANKR.
Alon Muroch, SSV’s core development leader, said a small group of firms is working together to secure the Ethereum blockchain. However, DVT technology will help to distribute this security by providing easy and quick access to an open-source protocol.
“DVT will change the current operation of staking,” Muroch added.
Ethereum Awaits The Upcoming Shanghai Upgrade
Meanwhile, Ethereum’s switch to a PoS mechanism has different stages to improve the network’s decentralization, security, and scalability. The transition replaced the mining system with ETH staking, allowing users to participate in transaction validation.
Earlier in December, reports revealed that liquid staking for Ethereum was increasing drastically. Nansen, a blockchain analytics company, said staked Ethereum is the first yield-bearing asset to attract massive attention in the DeFi space.
In other news, Ethereum supply has once again become deflationary. This deflation is because Ethereum’s 120 million tokens supply is now 2,000 less than its amount at the launch of Ethereum 2.0 last September.
At the time, Ethereum transitioned from the PoW (proof-of-work) to the PoS (proof-of-stake) consensus mechanism. Meanwhile, ETH’s price may rise due to the impending Shanghai Upgrade.
The Shanghai Upgrade is the next in Ethereum’s development timeline. However, the update will not address the issue of gas fees or enhance smart contracts. Still, it will allow the removal of Staked ETH, which has been dormant on the Beacon Chain.