A Deep Dive into Obol

The Obol Token Sale on CoinList is live until March 3rd, 2025 at 17:00 UTC.

We sat down with the Obol team to discuss what problem they solve, the benefits of at-home validators, the incentives to run Distributed Validators, key functions of the OBOL token, and their growth strategy leading into 2025.

Let’s dive in.

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1. What problems do Obol’s Distributed Validators (DVs) solve in current Web3 infrastructure, and how do they differ from traditional validators?

Proof of Stake blockchains like Ethereum are currently secured by traditional validators, which run on a single machine, using a single private key. If the machine goes down, the validator goes down. Worse still, if the private key is compromised, the validator is compromised. Each validator is a single-point-of-failure for the network. These single points of failure make it hard and risky to run validators, leading to centralizing dynamics.Obol DVs fundamentally shift Web3’s power dynamics, by enabling at-home node operators to run validators together, outperforming large professional operators and lowering risks. For the first time ever, anyone can operate high-performance, slashing resistant nodes with simple at-home hardware.

2. How do Obol DVs foster security and decentralization, particularly given the risks posed by centralizing tendencies in Web3 infrastructure?

Distributed Validators (DVs) enable multiple nodes or parties to run validators together. A distributed validator cluster consists of multiple nodes (ideally 4 or 7). Each node within a cluster has a partial validator key share that is generated in a distributed key generation ceremony (DKG). The nodes within a DV cluster operate together as a single logical validator through the inclusion of a DV middleware client, Charon.

DVs enable fault tolerance for validators, allowing a minority of nodes to go offline and allow the validator to stay online. They also reduce slashing risk, ensuring that at no time is the full validator private key present in a single place. If one of the nodes is compromised, the validator itself cannot be compromised.

3. Can you explain the key benefits that individual validators gain by using Obol DVs, in comparison to large professional operators?

Home stakers traditionally face significant barriers to entry and challenges running validators from home. Obol provides the technology, community, and ecosystem for every home staker to run high-performance validators and access delegated stake.

Lower barriers: Reduce financial and technical barriers to entry by sharing the 32 ETH requirement and technical support across operators within a cluster. (A 10-person DV cluster would only require each person to contribute 3.2ETH, for example.)
Improve effectiveness: Reduce the impact of power and internet outages by enabling fault tolerance in a DV cluster.
Access opportunities: Obtain a Techne Credential and gain access to delegated stake from partner protocols looking to expand and decentralize their node operator set.

4. Beyond the technological benefits, what are the incentives for operators to run DVs?

Obol’s Decentralized Operator Ecosystem already includes over 600 operators running DVs on mainnet. Many thousands more operators have proven their skills on testnet. Obol issues these operators Silver and Bronze Techne Credentials, respectively, to signal to staking pools and other networks which operators are suitable for expansion of their operator sets. This encourages operators to get involved with DVs and earn a credential, in order to have an opportunity to get onboarded to a partner such as Lido or EtherFi, run DVs, and earn fees from delegated stake. Operators and networks are able to connect and collaborate, thanks to Obol’s product suite, credentialed operator community, and support.

5. What has been the impact of Obol DVs on existing Ethereum staking protocols like Lido and EtherFi, and how does this shift affect the larger Web3 ecosystem?

Ethereum staking protocols like Lido and EtherFi are currently using Obol DVs on mainnet with hundreds of at-home operators to secure nearly $1 billion in staked assets. DVs allowed them to increase the size of their operator sets by tenfold, significantly increasing decentralization of their staking pools.

Obol DVs are also active on Gnosis Chain, and coming soon to Monad. Obol has a vision for securing all applicable PoS Layer 1 blockchains, which currently include more than $500 billion of staked assets, and are likely to secure trillions of dollars in the future. Obol not only acts as a foundation for Layer 1’s, but can also help secure other emerging Decentralized Infrastructure Networks like Layer 2’s, DePin, Sequencers, Provers, Preconfirmations, AVS’s, Oracles, etc.

6. With institutional investors increasingly showing interest in decentralized validator networks, how does Obol plan to cater to the needs of ETFs, insurance providers, and other institutional players

Institutions have always prioritized stability and security alongside potential yields. According to a recent Blockworks survey, over 61% of institutional respondents expressed willingness to pay a premium for the security benefits provided by DVs. With institutional interest on the rise, ensuring the security and profitability of staking becomes even more critical. When staking is introduced to Ethereum ETFs, Distributed Validators are likely to emerge as candidates to meet their stringent requirements. Quay Cove’s staked ETH fund is a prime example of using Obol DVs to reduce risk and increase rewards for institutional investors. Obol DVs are also recognized in the Liquid Collective’s Node Operator Risk Standard (NORS). Meanwhile, existing partnerships with insurance providers Relm and Chainproof ensure that Obol is ready for the institutional staked ETH market and staked ETH ETFs.

7. With the recent advancements in liquid staking protocols, how does Obol fit into the broader narrative of enhancing staked assets?

Obol DVs outperform traditional validator setups, even when run by geographically distributed community and home operators, as evidenced in both Lido and EtherFi’s staking pools. Higher performance means more rewards. It’s not only by increasing rewards, but also reducing losses, that Obol makes a difference. Security and profitability are intrinsically linked, with security breaches, slashing events, downtime, and key rotation issues directly impact profit and loss for stakers and staking pools. Node operator incidents in the past three years are noteworthy: twelve downtime incidents totaling 91 ETH, five slashing events totaling 333 ETH, and two key vulnerability events totaling 460 ETH of missed rewards. These types of incidents can be mitigated by using Obol’s DV clusters, which have a perfect record of zero slashing incidents.

8. What are the key functions of the OBOL token?

The launch of the OBOL Token enables Obol to decentralize ownership and governance, conduct retroactive funding for ecosystem builders, and improve operator economics. Obol now has everything it needs to expand its Decentralized Operator Ecosystem and solidify itself as the foundation of Decentralized Infrastructure Networks. The token has several key roles:

Governance: Proposals are voted on by delegates with voting power from OBOL holders.
Retroactive Funding: Projects receive OBOL, in accordance with voting from RAF rounds, fueling greater ecosystem development.
Staking, Restaking and DeFi: OBOL seeks to become a premier collateral asset within partner ecosystems, providing further value accrual and utility.
Increased Staking Rewards: OBOL may also be used for bonding mechanisms that will allow long-term aligned community members to access increased staking rewards.

9. Can you give us any insight into your growth strategy in 2025?

Ethereum staking protocols like Lido and EtherFi are still ramping up stake on Obol DVs, with roughly half of the $2 billion in committed stake currently active. Outside of Ethereum, Obol DVs are active on Gnosis Chain, and coming soon to Monad. Obol has a vision for securing all applicable PoS Layer 1 blockchains, which currently include more than $500 billion of staked assets, and are likely to secure trillions of dollars in the future. But Obol DVs can also act as a foundation for other infrastructure networks like Layer 2’s, DePiNs, Sequencers, Provers, Preconfirmations, AVS’s, Oracles, etc. These use cases are being actively explored, with partnership announcements coming soon.

10. What is the best way to get involved in the Obol community?

There are so many ways to contribute: You can run DVs, stake on DVs, contribute to the ecosystem and earn retroactive funding, become a governance delegate, or simply delegate your Obol Token voting power and participate in the governance forums. Check out these resources to get started:

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