One of the most anticipated crypto events this year is “the merge,” where Ethereum shifts from proof-of-work to proof-of-stake consensus.

This move aims to make Ethereum more secure and decentralized. However, it has also highlighted concerns about the potential influence of centralized providers over the network.

As a result — against the backdrop of a community that holds sacred the ethos of decentralization — developers are pursuing efforts to build infrastructure that could help mitigate these risks.

One such effort is the ssv.network (SSV) — a protocol that enables the secure splitting of ETH validator keys which results in more decentralized ETH staking.

Among other issues, SSV addresses the issue of “slashing” — a penalty enforced at the protocol level associated with a network or validator failure. This is where validators or node operators are removed from the network, and a portion of their stake is burned, usually around 18 ETH.

Currently, the majority of Ethereum staking is accomplished through trusted 3rd party service providers, which adds vulnerabilities to the network and exposes stakers to slashing risks.

In contrast, the SSV protocol enables the distributed control and operation of an Ethereum validator.

Through SSV, the validator key for staking is split between non-trusting nodes, or operators, so that a certain number of nodes can go offline without affecting network performance, and no operator can take unilateral control of the network.

Splitting a validator key allows the network to optimize for:

• Client diversity

• Slashing mitigation

• Uptime (reward optimization)

• Decentralization

• Security

In short, SSV allows everyone to participate in Ethereum’s staking economy in a secure and trustless manner — from DIY users all the way to staking pools and big institutional staking services.

DAO Governance at SSV

Beyond network infrastructure, SSV’s vision for decentralization extends into its governance structure as well through the SSV DAO.

Shadi Paterson, Head of Governance at SSV, explains the rationale behind the creation of the DAO:

One must consider this type of protocol a public good. You want to allow for sufficient decentralization such that no state powers or malicious actors can take it over. And moreover, you want it to be driven by the people that are going to use it, by the protocols.

Shad describes the SSV DAO as consisting of 10 people in the core team, with the work structured around committees and working groups.

Each committee oversees a high-level project function, such as marketing, for example, while working groups consist of committee members collaborating on specific initiatives.

Shad himself is a lead on two committees — the operations committee and the marketing committee:

“I don’t manage a specific team… I make sure the committee is working and that we’re seeking regular calls and making reports. Then within each committee, we have working groups and different initiatives, and I’m ultimately responsible for those initiatives taking place.”
“The way it’s managed is super loose,” he describes.

I literally just use Notion to track everything. We have a simple Kanban board with a timeline. We just tackle high-level projects, and everyone’s left basically to do their part on their own.

The People at SSV DAO

When projects are represented by an abstraction of a group such as DAOs — rather than the specific faces of leaders — it can be easy to forget the actual human beings involved.

On this note, Shad reveals some of the “superstars” behind SSV DAO who are driving the project forward:

“In the core team, there’s a guy called Austin. He’s basically proof of stake master. He advises both Lido and Rocket Pool. He helped with the Ethereum Foundation. He makes our cryptographic proofs, so he’ll prove the work mathematically. So that guy’s pretty f*****g cool.”

Shad is clearly in the company of some ‘big brains’ at SSV DAO:

“We also have another member who literally leads enterprise staking at Consensus… So he gives us all the insights of what’s going on and is able to contribute at a high level on our ecosystem strategy.”

“Who else? One guy called Madison. He also just left Consensus. He leads our growth. Why he’s valuable is because he’s able to think creatively,” he says. “I can keep on going. The team is actually pretty good.”

Decentralized Marketing & Contributing to SSV DAO

Contributing to SSV follows the standard model of submitting proposals, requesting grants, and voting. However, there is one terminology on the SSV DAO webpage that stands out: Decentralized Marketing, or ‘dMarketing.’ Shad elaborates further:

We think that marketing doesn’t necessarily need to be imposed. It can be created by the community. You just have to facilitate that.

“We do this in two ways,” he explains. “First, we allow for what we call micro-grants. Those can be considered articles or translations or hostings of Twitter spaces, general ambassadorship, and so on… this is a way to get people engaged very quickly, doing smaller tasks.”

“Then we also have what we call permission-less value [where] anyone is able to propose value to our marketing team,” says Shad. “Meaning you go to our community or forum, you have an idea, you can propose it. Or you can also propose to work full-time on it for the DAO.”

The process of joining the core team is typically a gradual, organic evolution. It usually starts with an active and invested contributor whose values are aligned with the project vision, asking to help out.

The DAO then creates small grant programs where they are rewarded for their contributions before they are considered or invited to participate in a more official role.

Sourcing, Onboarding, and Retaining Talent at SSV

Shad acknowledges that sourcing and onboarding talent is one of the biggest gaps at the moment for DAOs:

“Currently, it’s argued that the highest ROI per dollar you can spend is going to be on talent, right? But DAOs are massively under-utilizing this,” he says.

They all will want to scale, but they find it incredibly hard. Also, there’s lots of tooling and social understanding and learning to happen before that.

He also stresses the importance of creating onboarding journeys that cater specifically to the different user groups within the community:

“For SSV, there are, of course, just random token holders that are fans. Then, there are the people that might want to contribute in some way to the DAO. Then there are validators, then there’s operators, then there’s partners.”

All of these agents need to be directed and given a specific journey throughout.

Shad also suggests a focus on the quality of the community, as he shares his perspective on nurturing a community and retaining interest among SSV contributors:

“In the first, let’s say a thousand members, you’re really looking for early adopters who can buy into the vision. These people tend to be early adopters… and fundamentally understand your product in some way.”

“I think this is what you always want to focus on, and the way to get these types of people in is always just through honest communication and clear content,” he adds.

Shad shares one of the tactics for retaining community members: the “Secret Staking Society’’, essentially a gated chat group on SSV’s Discord where members can get alpha on all things from staking to marketing.

But the alpha group is just one aspect of SSV’s community retention approach:

“If you consider what people want in a community, there are two things to foster. Usually, like insights — you know, insider trading, give me something before the market knows, right? So that’s it for an alpha,” he says.

The second is you want to hang out, so it should be enjoyable… It should be fun; you should make friends… And that’s what [others] miss. There’s the customer support, they have Q&A’s, but it’s all fragmented, too high level. People need to have fun.

The SSV Token

With so many protocols launching their native token to fuel their network ecosystem, we asked Shad if there was a negative side to a protocol having its coin:

The downside of the token is that you have to spend brain cycles and management resources looking after them. That means using market-makers and considering what exchanges to be on… Then you have to consider your liquidity at all times and this type of thing.

However, according to Shad, the effort is worth it.

“If you don’t have a token, then you’re not able to have, for example, token incentives,” he explains. “Then you’re not able to incentivize testnets, of which we just ran one with over 6,000 testnet validators. Our token incentivizes. So, all in all, I’d say it’s highly beneficial.”

What’s Next for SSV

Shad reflects on the success of their recent IRL marketing efforts:

“We just ran a huge event at DevConnect in Amsterdam called ‘The Future of ETH Staking.’ We had every major player in ETH staking, which will be the biggest industry on Ethereum, in three months — Lido, Figment, Blockdaemon, and Rocket Pool. And that was really useful for us.”

He highly encourages those interested in actively growing the SSV network to apply for a grant to fund their project: “In terms of grants hackathons, we’re launching a $3.5 million grant program like next week or the week after.”

For the final note for our interview, Shad drops the ultimate industry “alpha”:

“The biggest alpha is that the merge, one of the largest events in all of the crypto (if not the largest) that will happen on the biggest Layer 1 blockchain — a blockchain with the highest amount of TVL — is going to move from proof-of-work to proof-of-stake.”

“You’re going to see that only 10% of Ethereum is staked right now; much more of that is going to be staked,” he explains. “The APY is gonna be even higher. It’s not going to be 4 percent. It’s going to be closer to ten percent on average. And that’s in Ethereum. It’s not in stables.”

It’s gonna be very bullish for anyone in the ecosystem working on the merge. And I would just keep an eye on that.