In the midst of the crypto bear market, startup Obol Labs has raised $12.5 million in venture funding to build out decentralized validator technology (DVT), a kind of tech that it believes solves some of the biggest pain points for Ethereum’s new validator class.
Among those on board with Obol Labs’ vision are crypto VC stalwarts Pantera Capital and Archetype, who co-led the series A round. Led by alums of Ethereum research and development firm ConsenSys, Obol Labs has now raised a total of $19 million.
Validators, which earn rewards for operating the network of nodes that keeps Ethereum up and running, face challenges ranging from high capital requirements (you must “stake” 32 ETH to become a validator) and technical complexity (validators can pay penalties if they screw up or go offline).
Due to these barriers, power over the network has flowed into the hands of just a few big actors, including crypto exchanges like Coinbase (Coinbase Ventures participated in the Obol series A) and Binance. Also among the largest validators is the decentralized autonomous organization (DAO) Lido – a kind of validator collective that pools user funds and distributes them across a network of professional node operators.
Obol says it is already working with Lido and StakeWise, a similar service, to use DVT to more securely and efficiently distribute user funds across operators.
Obol is not the only company taking a swing at DVT. The concept – far from unique to any specific company – is included in the Ethereum roadmap shared by network co-founder Vitalik Buterin, with “distributed validators” included as a core ingredient for ensuring a successful proof-of-stake network.
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