Fault tolerant staking

Fault tolerant staking was designed to overcome the problem of penalties and slashing on validators who faulted because of genuine reasons. A validator can be punished because of three reasons:

1. Being offline and not signing the consensus within the time frame

2. Attesting two different blocks on the same chain with the same key

3. Proposing two blocks in the same slot

One can avoid such punishments by implementing a FTS mechanism that involves collaborative stacking, more formally known as distributed validator technology - DVT. DVT employs the same technology used behind secret shared validators to perform validation and proposing new blocks.

DVT enables a new kind of validator, one that runs across multiple machines and clients simultaneously, but behaves like a single validator to the network. This enables your validator to stay online even if a subset of the machines fails because of some unforeseen reasons.

The presence of this safety net allows for staking that is tolerant to some faults. Hence, the name fault tolerant staking.

Advantages of FTS

Having a distributed and fault tolerant mechanism is beneficial to both, the block chain ecosystem and the validators as well.

Advantages for validators

• Reduce your liabilities. Allowing for distributed validation on machines reduces risks of the entire system going down.

Advantage for stakers

• stakers and validators can be different. For a staker, having a FTS will reduce or diversify risk by not having a single point of failure.

Advantage for network

• Increased security. By ensuring that at least a part of every validator is online, the number of bad actors can be reduced.

• Small validators can group and act like a single validator, ensuring that the control is decentralized, and that power is not concentrated with staking providers.

Disadvantages

• Increase in cost to have multiple systems running.

• Increased maintenance cost of systems as at least the minimum threshold number of system have to be online.

Problems addressed by FTS

• Encourage more users to stake ETH and act as validators, by not being afraid of the penalties and slashing. This would increase the robustness of the system.

• Provide a safety net for staking providers so that unforeseen situations like calamities do not take a huge toll on their finances.

• Reduce the possibility of power concentration in the hands of mega staking providers. If the power gets concentrated, then the corporations can collaborate to alter the network to their profits. Employing FTS on a block chain network will increase the confidence on the network, as even smaller or individual miners can team up against mega corporations.