This post urged me to write down what participating in ethereum is for me (and maybe others), this might help aim for the right solution
- Influence/ participate - Individuals/ small groups that can participate and secure ethereum is a powerful idea.
- Decentralization - ethereum can’t be “taken down” or manipulated by a single entity
- Economics - No-one expects to get rich but economics play a major decision driver for many stakers (pooled/ institutions and individuals)
I like approach 1, for obvious reasons, but it needs to consider the above points to make it work.
DVT can be run by home stakers easily, it does have limitations in term of the number of consensus participants. Theoretically 1,000 operators on a cluster can be made to work (similar to committee based approach and BFT limitations).
This means 1,000*4,096 = up to 4M “operators” which seems pretty good.
The above requires better key management and secret sharing, potentially the ability to change validation keys to facilitate cluster set changes without compromising security.
Another DVT benefit is that the individual validator is much harder to compromise. Considering “very large” operators will exist, just by the nature of how staking works, it’s better if they are part of a DVT cluster than running a few 4K ETH validators on their own