Validator sets are the new IaaS. The first wave of infrastructure sold access to compute and storage via RPC endpoints, commoditized by providers like Alchemy and Infura. The next wave sells trust-minimized execution and economic security as a service, abstracting the complexity of running a live, slashed network.
the-modular-blockchain-thesis-explained
Blog
Why Validator Sets Are the Next Infrastructure-as-a-Service
The modular blockchain thesis creates a new market: consensus-as-a-service. Rollups will rent validator sets from providers like EigenLayer, not build them, mirroring the cloud computing revolution.
introduction
THE SHIFT
Introduction
Blockchain infrastructure is evolving from raw RPC nodes to specialized, high-stakes validator set services.
This shift moves risk on-chain. Unlike passive RPC nodes, validator services like Obol and SSV Network manage active signing keys with real financial penalties. This creates a high-margin, sticky service where uptime and slashing avoidance are the product, not just API calls.
The demand driver is modularity. Rollups like Arbitrum and Optimism initially centralized their sequencers for speed. As they decentralize, they require distributed validator technology (DVT) to coordinate L2 consensus without recreating the staking ecosystem from scratch, creating a massive greenfield market.
thesis-statement
THE INFRASTRUCTURE SHIFT
The Core Thesis: Consensus is a Commodity
The value in blockchain infrastructure is shifting from consensus execution to validator set orchestration and distribution.
Validator sets are the new IaaS. The computational work of ordering and attesting to transactions is a solved, commoditized problem. The real value accrues to the entity that aggregates, secures, and distributes this computational resource.
Ethereum is the proof. Its security stems not from a novel algorithm, but from the economic weight and distribution of its validator set. Lido and Rocket Pool succeed by providing liquid, accessible exposure to this underlying commodity.
Rollups validate this thesis. An Arbitrum or Optimism chain is a business selling execution, but it rents consensus from Ethereum. The chain's security is a direct function of the quality of the rented validator set.
Evidence: EigenLayer's $15B+ restaked ETH demonstrates the market demand to reuse the Ethereum validator set. Protocols like Babylon and Avail are building standalone consensus layers to be leased by new execution environments.
market-context
THE PROBLEM
The Current State: Fragmented, Expensive, Insecure
Today's multi-chain ecosystem is a collection of isolated, high-friction networks that penalize users and developers.
Fragmented liquidity and state create a negative-sum game. Moving assets between Ethereum, Arbitrum, and Solana requires bespoke bridges like Across or Stargate, each with its own trust assumptions and capital inefficiencies.
Expensive security is outsourced repeatedly. Every new L2 or appchain must bootstrap its own validator set, replicating the capital and operational costs that Ethereum's base layer already solves.
Insecure bridges are systemic risks. The $2 billion in bridge hacks demonstrates that fragmented security models fail. Protocols like LayerZero attempt unification but introduce new oracle/relayer trust vectors.
Evidence: The Total Value Locked in bridges has stagnated below $20B while L2 TVL exceeds $40B, proving users prefer native chain liquidity over bridge-dependent pools.
key-trends
WHY VALIDATOR SETS ARE THE NEXT INFRASTRUCTURE-AS-A-SERVICE
Three Trends Driving the IaaS Shift
The monolithic app-chain model is breaking under capital and operational load, creating a new market for specialized, pluggable security.
01
The Staking Capital Crunch
Launching a sovereign chain requires $1B+ in TVL just for credible security, creating an impossible barrier for new L1s and rollups. The solution is to rent economic security from an established validator set, turning a capex problem into an opex solution.\n- Benefit: Instant access to tens of billions in pooled stake\n- Benefit: Slashes time-to-market from months to weeks
$1B+
Barrier Removed
Weeks
Time-to-Market
02
The Specialization of Consensus
General-purpose validators are inefficient. The future belongs to optimized sets for specific tasks: fast-finality L1s, high-throughput rollups, or secure bridging. This mirrors the evolution from generic cloud VMs to GPU/TPU instances.\n- Benefit: ~500ms finality for DeFi apps via tailored networks\n- Benefit: Dedicated MEV management and execution layers
~500ms
Finality
Specialized
Hardware
03
The Modular Security Stack
Architects now compose chains from best-in-class components: Celestia for DA, EigenLayer for restaking, Espresso for sequencing. Validator sets are the final, critical module, providing a standardized security API. This creates a liquid market for trust.\n- Benefit: Interchangeable security providers reduce vendor lock-in\n- Benefit: Enables cross-chain atomic composability by default
Plug-and-Play
Integration
Liquid
Trust Market
WHY VALIDATOR SETS ARE THE NEXT INFRASTRUCTURE-AS-A-SERVICE
The Validator IaaS Landscape: A Comparative View
Comparison of core infrastructure models for acquiring and managing a decentralized validator set, moving beyond simple node hosting to protocol-level security.
| Core Metric / Capability | Traditional Node Hosting (AWS, GCP) | Managed Validator Services (Figment, Chorus One) | Decentralized Validator Middleware (Obol, SSV Network) | Restaking-Powered Sets (EigenLayer, Karak) |
|---|---|---|---|---|
Primary Value Proposition | Raw compute & storage rental | White-globe validator operation & slashing insurance | Trust-minimized, fault-tolerant validator clusters | Monetize cryptoeconomic security via restaking |
Validator Key Custody | Client holds keys (high risk) | Provider holds keys (custodial risk) | Distributed Key Generation (DKG) / Multi-Operator | Actively Validated Service (AVS) operator holds keys |
Fault Tolerance Threshold | Single point of failure (0-of-1) | Provider redundancy (1-of-1) | Byzantine Fault Tolerant (e.g., 4-of-7 operators) | Dependent on AVS operator set & restaker delegation |
Time to Deploy Validator Set | < 1 hour (per instance) | 1-3 days (onboarding) | 1-2 weeks (cluster formation & bonding) | Instant (for existing restaked capital) |
Capital Efficiency Model | Pay-as-you-go fiat | Commission on rewards (5-15%) | Operator profit-sharing from rewards | Restaking rewards + AVS incentive rewards |
Native Slashing Protection | ||||
Multi-Chain Support via Single Set | ||||
Protocols Using This Model | All (foundational layer) | Cosmos, Polygon, Solana | Ethereum (primary focus) | EigenLayer AVSs (e.g., EigenDA, Lagrange) |
deep-dive
THE CAPITAL EFFICIENCY ARGUMENT
The Economic Engine: How Rented Security Wins
Renting a validator set transforms security from a capital-intensive asset into a high-velocity service, unlocking liquidity and accelerating chain deployment.
Security is a service, not an asset. The traditional model of bootstrapping a new chain requires a massive, illiquid capital outlay to attract and bond a validator set. This capital is locked, creating a significant opportunity cost and a major barrier to entry for new networks.
Renting security decouples capital from consensus. Protocols like EigenLayer and Babylon enable validators from established chains (e.g., Ethereum, Bitcoin) to re-stake their bonded assets to secure new systems. This creates a shared security marketplace where security is a commodity purchased with fees, not raised as equity.
The economic flywheel is self-reinforcing. As more chains rent security, the demand for the underlying staked asset increases, raising its yield and attracting more capital to the base layer. This creates a positive feedback loop that benefits both the renting chains and the security providers.
Evidence: The rapid growth of EigenLayer's Total Value Locked (TVL), which surpassed $15B, demonstrates the massive latent demand for this model. It proves that validators prioritize yield optimization over single-chain loyalty when presented with a secure, trust-minimized framework.
risk-analysis
THE CENTRALIZATION TRAP
The Bear Case: Systemic Risks of Consensus IaaS
The commoditization of validator operations creates a systemic single point of failure, concentrating trust in a handful of infrastructure providers.
01
The Lido-ization of Every Chain
Just as Lido commands ~30% of Ethereum stake, consensus IaaS risks creating dominant, protocol-agnostic operators. This isn't about one chain; it's about a single entity like Figment or Chorus One controlling critical mass across Solana, Cosmos, and Polygon. The network effect of their reputation and tooling creates a winner-take-most market.
- Cross-chain correlation risk: A failure at one provider impacts multiple ecosystems simultaneously.
- Governance capture: A unified voting bloc can dictate protocol upgrades across chains.
- The 'Too Big to Slash' Problem: Penalizing a mega-provider could cause a chain-wide crisis.
30%+
Stake Share
10+
Chains Served
02
The MEV Cartel Problem
Consensus-as-a-Service providers are perfectly positioned to become mandatory MEV extractors. By controlling the physical servers and the validator client software, they can implement proprietary order flow auctions (like Flashbots SUAVE aims to democratize) and capture the majority of extractable value. This turns a public good into a private revenue stream.
- Vertical integration: From RPC (Alchemy) to block building (mev-boost) to validation (IaaS).
- Opaque pricing: Users pay for 'infrastructure' while providers profit from hidden MEV.
- Stifled innovation: Independent builders are locked out of the most profitable blockspace.
$500M+
Annual MEV
>60%
Block Share
03
Geopolitical & Regulatory Attack Vector
A centralized IaaS stack presents a clean, high-value target for regulators. Unlike decentralized permissionless validators, companies like Amazon Web Services or centralized staking providers have legal entities, CEOs, and physical assets that can be subpoenaed or sanctioned. A OFAC-compliance mandate at the infrastructure layer could censor transactions across dozens of chains instantly.
- Single jurisdiction risk: Most major providers are concentrated in the US/EU.
- Protocol fragility: Networks become dependent on the legal standing of a few corporations.
- The Tornado Cash Precedent: Infrastructure-level bans are the next logical escalation.
3
Key Jurisdictions
100ms
Censor Latency
04
The Client Diversity Illusion
IaaS providers standardize on the most 'efficient' validator client software (e.g., Prysm on Ethereum), killing client diversity in the name of operational simplicity. A bug in that single client, now deployed at scale by all major providers, could cause a simultaneous chain halt across multiple networks. The provider's risk management becomes the network's existential risk.
- Homogeneous failure mode: All eggs in one software basket.
- Update coordination risk: A forced, synchronized upgrade across providers is a systemic event.
- Stifled R&D: Niche client teams (Teku, Lighthouse) lose economic support.
>66%
Client Majority
1 Bug
To Halt Chain
future-outlook
THE SHIFT
The 2025 Stack: Specialized Consensus Providers
General-purpose L1s are being unbundled into specialized consensus providers, creating a new IaaS market for security.
Validator sets are becoming a commodity. The core function of a blockchain—ordering transactions and producing blocks—is now a service you can rent. Protocols like EigenLayer and Babylon abstract this away, letting new chains launch without bootstrapping their own validator network.
This unbundles the monolithic L1. A blockchain's value is now its execution environment and state, not its consensus mechanism. This separation allows for specialized consensus providers that optimize for cost, latency, or finality, similar to how AWS offers different compute instances.
The market will price security. The cost to rent a validator set will be determined by its economic security (total stake) and liveness guarantees. A high-value DeFi app will pay a premium for Ethereum-level security, while a gaming chain might opt for a cheaper, faster provider.
Evidence: EigenLayer has over $15B in restaked ETH securing external systems. This proves the demand for re-staking-as-a-service and validates the economic model of decoupled consensus.
takeaways
VALIDATOR SETS AS IaaS
TL;DR for Builders and Investors
The monolithic appchain thesis is fragmenting. The new stack is about composing specialized, sovereign execution layers secured by shared, programmable validator sets.
01
The Problem: The Appchain Security Tax
Launching a standalone chain means recruiting and bootstrapping a validator set from scratch, a massive capital and operational overhead that distracts from core product development.\n- Capital Lockup: Requires $50M-$200M+ in staked tokens for credible security.\n- Operational Drag: Managing slashing, upgrades, and governance for validators.\n- Time-to-Market: 6-12+ month delay before mainnet launch.
$100M+
Security Cost
6-12mo
Delay
02
The Solution: Shared Security as a Commodity
Projects like EigenLayer, Babylon, and Cosmos ICS turn validator sets into a rentable resource. Developers lease security from established networks (e.g., Ethereum, Bitcoin) instead of building their own.\n- Instant Credibility: Inherit the $100B+ economic security of Ethereum from day one.\n- Capital Efficiency: Redirect 90%+ of token supply to incentives and growth, not staking.\n- Composability: Enable native cross-chain trust for bridges (like LayerZero) and oracles.
$100B+
Borrowed Security
90%+
Capital Freed
03
The New Business Model: Validator Yield Arbitrage
This isn't just infrastructure; it's a new financial primitive. Validators can restake capital to earn fees from multiple services simultaneously, creating a yield marketplace.\n- Yield Stacking: Ethereum validators can earn fees from EigenLayer AVSs, Babylon timestamping, and rollup sequencing.\n- Risk Pricing: Security becomes a commodity with variable pricing based on slashing risk and demand.\n- Market Size: Targets the $100B+ staked asset market, unlocking idle security capital.
3-5x
Yield Multiplier
$100B+
Addressable Market
04
The Architectural Shift: From Monoliths to Modules
The endgame is modular, intent-based architectures. Validator sets provide the trust layer for specialized execution environments (rollups, appchains) and cross-domain systems (like UniswapX and Across).\n- Sovereign Execution: Run custom VMs and fee markets without forking consensus.\n- Trust Minimization: Build cross-chain apps with the same security assumptions as L1.\n- Developer UX: Deploy a secure chain with a CLI, similar to launching a cloud instance.
~1hr
Chain Deployment
L1 Grade
Security
ENQUIRY
Get In Touch
today.
Our experts will offer a free quote and a 30min call to discuss your project.
NDA Protected
Confidentiality24h Response
Time to ValueDirectly to Engineering Team
No Sales Fluff10+
Protocols Shipped
$20M+
TVL Overall