Obol Network to fund ‘sustainable’ Ethereum development
Successful distributed validator technology needs distributed funding, founders say
Adobe Stock and Shutterstock-Pixelsquid/Shutterstock modified by Blockworks
As the price of ether increases, the cost of running a full solo staking node — with 32 ETH now worth $115,000 — moves further out of reach for all but the most hard core hobbyists.
One of the social goals that Oisin Kyne and Collin Myers, founders of Obol Network, care about most is enabling people that don’t have that kind of capital to participate in Ethereum consensus.
The pair looks forward to the day when the number of entities and locations validating the network will rise tenfold from its current crop of single-digit thousands of operators.
That includes a fellow in a Kenyan village who, according to Kyne, participates in a distributed validator cluster via EtherFi, running his hardware off a Starlink and a generator.
“It certainly feels good to have people that are staking — that have the technical ability and are really into it, but either weren’t in early or don’t have, you know, bags — that can actually decentralize Ethereum and quite happily do it from the middle of nowhere,” Kyne told Blockworks.
Obol has spent the past few years proving out the technology to decentralize projects like Lido, its launch partner, and to enable more solo stakers as well as new paradigms like squad staking.
“We worked with [Lido] to integrate the technology into their stack, and now we’re progressively opening the code base, decentralizing the community, and in the future plan to incentivize the community and bring everyone together around this contribution based mindset,” Myers told Blockworks.
As a first step, Obol has announced the “1% For Decentralisation” funding model for the DVT middleware provider.
Under the plan, Obol’s distributed validator (DV) clusters will contribute 1% of their staking rewards “toward projects that add value and impact at the Ethereum consensus layer, including technology partners, researchers, community educators, node operators, and more,” according to a blog post published Tuesday.
The initiative piggybacks off the EasyRetroPGF — or Retroactive Public Goods Funding — system pioneered by GitCoin.
Whereas public good funding from the Optimism Foundation focuses on the execution layer and user adoption, “there needs to be a more concerted focus around the validator, infrastructure area, the consensus integrity, that whole side of the network,” the Obol founders say.
Middleware provides an interface between Ethereum’s consensus layer and software further up the modular stack.
“The creation of middleware enables add-on use cases to your existing experience,” Myers explained. “Without middleware, it’s just a boring old validator — you can’t do anything.”
MEV Boost is one example in wide use alongside Obol today, that enables the little guy to earn similar staking yields as large professional operators. And soon validators will be able to participate in EigenLayer Actively Validated Services (AVS) or similar offerings on top.
“All of this is an extension of the validator as a world-class citizen of Web3,” Myers said.
Ethereum is sometimes criticized for the complexity of its design, or for tolerating centralizing influences in certain areas, such as block building and the scaling of the execution layer.
But Myers feels those attacks are misplaced.
“From where I sit, two years ago we went from bad rent extraction, client centralization, a completely monolithic software stack, and now we’ve moved to modular, a bit more decentralized, open source, multiple options, lots of funding, good debate — and for me that’s progress,” he said.
While there is some movement in the direction of ossifying the base consensus layer, he pushes back against the notion that the roadmap is decreasing innovation at layer one. Rather, “they are just enabling it to exist elsewhere through decentralization…and DVT is a living example of that,” he said.
The “stage” framework used by L2beat is a useful gauge of decentralization progress, and Osin agreed with Vitalik’s commitment to push “layer-2s” as such to reach the Stage 1 level by the end of the year.
“It’s an interesting social showing, of people being like, ‘no, we’re not going to tolerate a sidechain masquerading as an L2, unless you can permissionlessly exit back to L1,” Osin said.
Lido is backing the new Obol funding approach, with contributor Will Shannon, calling it “a fantastic approach to strengthening the resilience and decentralization of the Ethereum protocol.”
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