Introduction
Decentralized Validated Services (DVSs) are decentralized infrastructure services that tap into cryptoeconomic security and reward Operators for providing it.
Overview
A Decentralized Validated Service (DVS) is any system that requires its own distributed validation semantics for verification. These services cover a wide range of applications, including middleware, services, chains, networks, and Proof-of-Stake (PoS) systems. DVSs leverage Pell's restaking capabilities, where services are validated by Pell Network Operators, supported by delegated restaked assets through Pell’s core contracts.
Each DVS is governed by a set of smart contracts with specific slashing rules designed to penalize malicious actions by operators. By reusing BTC and its liquid staking derivatives (LSDs) to secure multiple services, stakers can reduce capital costs while significantly enhancing the trust guarantees for individual services.
DVSs function as decentralized infrastructure services that capitalize on cryptoeconomic security, rewarding Operators for their contributions. There are various ways to leverage a high-trust model in distributed systems and the dApps built on top of them.
Trust Inheritance
Builders can select specific types of trust or a combination thereof, which will be programmatically inherited and used to develop new protocols:
Economic Trust: Based on the financial stake involved, economic trust is grounded in capital-backed commitments, ensuring rational behavior through objective validation semantics. Malicious actions can be proven on-chain and penalized. Examples include optimistic claims and light client bridges.
Decentralized Trust: Measured by the number of independent nodes, decentralized trust relies on a large, distributed validator set to prevent collusion. This model is especially valuable for AVSs with failure modes that are not easily provable on-chain. Examples include multiparty computation and data availability layers.
Inclusion Trust: Measured by the percentage of validators participating, inclusion trust allows for the experimentation of additional opt-in features to the native blockchain protocol without altering its core. This enables the combination of various trust models. Examples include MEV management and single-slot finality.
Programmable Trust and Arbitrary Tasks
DVS implementations must define the tasks to be performed, consider their computational requirements, and establish slashing conditions. Operators then execute these validation tasks using DVS-provided node software, implementing off-chain infrastructure business logic and contributing to the network's security and integrity.
Decentralized Trust Requirements: If a protocol requires decentralized trust, the tasks for Operators can be repetitive but lightweight, enabling broader participation from less powerful nodes (e.g., verifying zero-knowledge proofs or running light nodes of other blockchains).
Horizontal Scaling: Alternatively, DVS modules can employ horizontal scaling to distribute the computational workload across all participating nodes (e.g., running full nodes of other blockchains).
Custom Slashing and Rewards
DVSs set custom slashing and reward parameters, which are enforced via smart contracts that manage withdrawal credentials for staked BTC LSD. This ensures that any malicious activity results in slashing, thereby maintaining the integrity of the system.
DVS Integration with Pell
To integrate with the Pell core contracts, each DVS must deploy or modify instances of contracts from the Pell repository. This integration ensures their service maintains an up-to-date registry of its operators.
Currently, each DVS must implement a key on-chain function: defining the conditions for operator registration and deregistration. These conditions dictate how an operator can join or leave the DVS. The Pell repository provides foundational components to support these functions.
In the future, the core contracts and this repository will be expanded to include additional conditions, such as:
Reward Conditions: These will define how operators are compensated for the services they provide.
Slashing Conditions: These will establish what constitutes "malicious behavior" within the DVS and outline the corresponding penalties.
Each DVS consists of two essential components:
On-Chain Contract: This manages interactions between stakers and operators, ensuring the security of assets and validating operator actions through contract logic.
Off-Chain Software: Operated by the network's operators, this software performs validation tasks to maintain system efficiency and data integrity.