Stake Your Claim: Zero-Trust Validator Deployment Leveraging NFTs and Smart Contracts in Proof-of-Stake Networks

TL;DR

This paper introduces a trustless, decentralized validator deployment system for Proof-of-Stake blockchains using NFTs, smart contracts, and treasury mechanisms to enhance security, transparency, and user control.

Contribution

It proposes a novel multi-party zero-trust validator infrastructure leveraging NFTs and smart contracts, enabling autonomous staking and improved depositor protections.

Findings

NFT-based stake representation enables trustless participation.

Automated reward distribution and penalty enforcement improve security.

System enhances decentralization and user privacy in PoS networks.

Abstract

We present a novel method for a multi-party, zero-trust validator infrastructure deployment arrangement via smart contracts to secure Proof-of-Stake (PoS) blockchains. The proposed arrangement architecture employs a combination of non-fungible tokens (NFTs), a treasury contract, and validator smart contract wallets to facilitate trustless participation in staking mechanisms. The NFT minting process allows depositors to exchange their capital for an NFT representing their stake in a validator, while the treasury contract manages the registry of NFT holders and handles rewards distribution. Validator smart contract wallets are employed to create a trustless connection between the validator operator and the treasury, enabling autonomous staking and unstaking processes based on predefined conditions. In addition, the proposed system incorporates protection mechanisms for depositors, such as triggered exits in case of non-payment of rewards and a penalty payout from the validator operator. The arrangement benefits from the extensibility and interoperability of web3 technologies, with potential applications in the broader digital ecosystem. This zero-trust staking mechanism aims to serve users who desire increased privacy, trust, and flexibility in managing their digital wealth, while promoting greater decentralization and transparency in the PoS ecosystem.