A new system is currently being created to determine if a decentralized blockchain indeed is. To this end, the developer of Cardano (ADA), Input Output Global (IOG), is collaborating with the University of Edinburgh.
IOG claims that most so-called decentralized blockchains are actually not. However, these assertions are subjective because there is no standard framework for evaluating decentralization. The tech firm says the Edinburgh Decentralization Index (EDI) aims to address this issue. With lcollapse of FTX, Binance is still ahead of other exchanges. The platform could present a danger from the point of view of decentralization. Indeed, some claim that the exchange is starting to have too much power in the crypto market, so as to have an influence on users.
The danger of too little decentralization is real. This is the primary characteristic of cryptocurrencies. If this decentralization were to weaken due to players presenting what could be called quasi-monopolies, then investor confidence could weaken.
A true standard of decentralization
The ambition of the EDI is to create a unified framework capable of evaluating degrees of decentralization. This framework is particularly applicable to data extracted from Bitcoin, Ethereum, Cardano. IOG says the index will assess the degree of decentralization of a blockchain based on multiple layers. Some of these differences in factors include API, consensus mechanism, hardware, software, network, tokenomics, governance, and geographical distribution of validators.
The first step of the initiative involves the launch of a research project that will define and measure decentralization. The EDI will thus be a live tracker supported by a calculated and constantly revised methodology. The calculations are already carried out by a team from the University of Edinburgh. The firm claims that EDI will provide a measurable decentralization standard for the blockchain industry and will have multiple use cases. It could be subject to adoption by governments as part of a broader crypto regulatory framework. Therefore, the idea is to allow users and organizations to determine the decentralization of a chain with more certainty.
Source : The Daily Hodl
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