Inter-Pool Security: Reaching Maximum Security for KYVE’s Data Pools
Building the leading source of trustless, valid data in Web3, it’s imperative that, while staying fully decentralized, maximum security is achieved. Throughout this past year, KYVE’s code infrastructure has been tailored to best secure the protocol and weed out any possible points for error or attack. And now, with the release of our seventh chain update, the last major piece to our security puzzle has been added: Inter-Pool Security.
This new feature decreases the possibility of high-staked nodes taking over a pool by allowing them to be active in numerous pools at once, securing them with their stake and delegation. However, getting slashed in one pool affects the node’s entire stake, making them more incentivized to behave accordingly. Let’s go through how this new feature works in more detail…
Inter-Pool Security Overview
Prior to Inter-Pool Security, nodes could only join one pool at a time, and with a very high stake, were able to entirely take over a pool by simply staking greater than the majority of the other nodes in the pool.
To address this and enforce stronger pool security, we opted to use a global stake approach in which one node provides security to multiple pools. With Inter-Pool Security, a node can now send a transaction to join or exit a pool. A leave-time was added to prevent nodes from rapidly changing pools (same concept as unbonding).
Now, for every pool a node joins, they have to specify a valaddress (the address for the node) which is then allowed to vote in favor of the actual staker. The staker has their private key kept somewhere safe so that, in case a server gets compromised, they can revoke the valaddress and create a new one. Each user will have a valaccount that holds the user’s valaddresses as well as data on the staker the valaccount is connected to.
It’s important to note that the unbonding time for lowering the stake was kept in place. If a node is unable to upload data to a pool, it will receive an upload slash and will be removed from the pool immediately.
To join a pool, the self-stakers and delegators are now also subject to slashing. To efficiently calculate the delegation rewards and slashes, KYVE employs the F1-Fee-Distribution Algorithm. This is a scheme in the Cosmos ecosystem which splits fees and inflation between validators on each block, enabling delegation rewards payout and slashing calculation.
For example, if a node receives a 1% slash, the self-stake and the delegation will be reduced by 1%. The delegation will now also affect the upload probability. In this situation, the bundle proposal and voting flow stay unaffected, and all voters on a bundle get part of the rewards to distribute equally.
Finally, a positive side effect of inter-pool security is a reduced operating cost, resulting in higher APY, creating additional incentives for nodes in the protocol.
The Next Steps
Overall, bringing on this new Inter-Pool Security feature has brought KYVE that much closer to being mainnet-ready, reducing any last minor opportunities for error or attack. We look forward to seeing how this new update performs within KYVE’s testnet network, and how the community takes to it! If you’re not already, be sure to continue testing KYVE’s testnet to help our team best prepare for KYVE’s next major development steps.
About KYVE
KYVE, the Web3 data lake solution, is a protocol that enables data providers to standardize, validate, and permanently store blockchain data streams. By leveraging permanent data storage solutions like Arweave, KYVE’s Cosmos SDK chain creates permanent backups and ensures the scalability, immutability, and availability of these resources over time.
KYVE’s network is powered by decentralized uploaders and validators funded by $KYVE tokens and aims to operate as a DAO in the near future. This past year KYVE has gained major support, currently backed by top VCs, including Hypersphere Ventures, Coinbase Ventures, Distributed Global, Mechanism Capital, CMS Holdings, IOSG Ventures, and blockchains such as Arweave, Avalanche, Solana, Interchain, and NEAR.
