Kraken Implements Distributed Validator Tech for Ethereum

Kraken has successfully implemented distributed validator technology (DVT) for its Ethereum staking service using SSV Network, becoming the first significant crypto exchange to deploy this fault-tolerant setup at scale. DVT allows a single Ethereum validator key to be divided into secure shares, enabling multiple operators to collaboratively sign responsibilities, enhancing overall reliability against outages and failures. SSV Network, designed as an open protocol for DVT, aims to boost validator liveness and safety by introducing geographic and client diversity. This structure ensures that no single operator possesses the entire key and that multiple independent nodes are required to validate blocks. Jonathan Marcus, Kraken’s head of strategy, custody, and staking, emphasized that this rollout significantly enhances the performance reliability of their ETH validators. A key benefit of this deployment is the reduction of correlated slashing risks, which arise when nodes go offline or act inconsistently. By distributing responsibilities among distinct operators, DVT minimizes single points of failure, helping exchanges and custodians meet their uptime and risk-management objectives. Alon Muroch, Founder of SSV Labs, noted that Kraken's advancements are likely to encourage secure staking participation and bolster the security of the Ethereum network, with his firm currently securing over $18 billion in staked assets across 126,000 validators. In addition to its staking service, Kraken is broadening its product offerings. The exchange is launching “xStocks,” which are tokenized representations of equities for select non-U.S. markets, and plans to support issuance on additional chains like Tron, reflecting a wider industry movement toward tokenizing traditional assets. Disclaimer: The Block is an independent media outlet providing news, research, and data. As of November 2023, Foresight Ventures is a majority investor in The Block and also invests in other crypto companies. While Bitget is an anchor LP for Foresight Ventures, The Block operates independently to deliver objective and timely information about the crypto industry.