Distributed Validator

MagmaDAO is building the first Distributed Validator Network outside of Ethereum. The Distributed Validator operates a Monad full node in a decentralized manner.

Benefits of Monad DPOS for DVT-based Liquid Staking

The delegated nature of Monad staking makes DVT-based Liquid Staking more user friendly, easier to build, and simpler in design compared to Ethereum, reducing smart contract complexity. This is because Monad offers Delegated POS, where Ethereum follows a POS model without in-protocol delegation. What this means is that DVT-based liquid staking on Ethereum requires extending the Ethereum protocol and wrapping native staking functionality, because nodes cannot accept delegated stake, and all stake must be staked from the node itself (or in the case of Ethereum DVT-LST, the smart contract wrapping the deposit function). With DPOS on Monad, however, the MagmaDAO smart contract seamlessly receives Monad token deposits from liquid stakers and delegates them to one of the Distributed Validators. Furthermore, fewer distributed validators are needed, because on Monad, you are not limited to 32 ETH per distributed validator (as is the case on Ethereum).

Key Share Distribution

The decentralization of Key Shares are based on Multi-Party Computation (MPC). Multi-Party Computation is used by wallet providers like Fireblocks, Web3Auth, and many others. The benefit of using MPC is that it prevents any single entity from having access to the full private key of the validator.

Key Shares are created using Distributed Key Generation (DKG). The Distributed Validator splits ownership of each validator into Key Shares using Boneh–Lynn–Shacham (BLS) threshold signatures. Operators, which refer to validators participating in DVT, receive Key Shares based on random probability distribution, ensuring equitable dissemination.

Distributed Validator Network

MonadBFT consensus requires subsecond validation. Block times are 1 second, and validators need to sign messages in multiple rounds of consensus. Therefore, DVT for Monad is designed to support a high throughput P2P network for reaching consensus amongst a limited number of operators for signing messages.

When a signature is required from the validator, operators participating in the P2P DVT Network coordinate to reach a 2/3 consensus on the signature. Subsequently, the message is sent to the network for validation. Operators who intend to leave the network may have their Key Shares revoked. while bad actors may be ejected by a 2/3 majority vote.

Benefits of DVT

DVT offers significant benefits to both MagmaDAO and Monad.

• Reduced risk of offline slashing: With DVT, multiple operator nodes can go offline without the validator losing liveness.

• Reduced risk of lost keys: Key shares are disposable and can be re-generated.

• Increased decentralization: Any malicious actor would require control of 2/3 of the network, and would be subject to slashing.