We all have faith in decentralization, defi, and so on, but we can’t deny that there are some crucial points to take into account.
1. What does the term “decentralization” really mean for you? 2. What are the risks behind a full decentralized world? 3. How could we reach an healthy decentralisation?
I found this interesting article and I want to hear your sincere opinion on this.
The core of the article is:
There is a “decentralisation illusion” in DeFi due to the inescapable need for centralised governance and the tendency of blockchain consensus mechanisms to concentrate power. DeFi’s inherent governance structures are the natural entry points for public policy.
All DeFi platforms have central governance frameworks outlining how to set strategic and operational priorities, eg as regards new business lines.11 Thus, all DeFi platforms have an element of centralisation, which typically revolves around holders of “governance tokens” (often platform developers) who vote on proposals, not unlike corporate shareholders. This element of centralisation can serve as the basis for recognising DeFi platforms as legal entities similar to corporations.
1. What does the term “decentralization” really mean for you?
To me decentralisation is all about the opposite of centralisation, the most important part of it is the benefits to the common man, meaning we can start getting some of the benefits that have only been for big companies who have built their wealth around using us, this cannot go on.
I dont think its an illusion, just think it needs to be redefined to what it is, look at btc its not even decentralised ,most of the hash rate and tokens and network belong to a syndicate of mining pools all working together.
What are the risks behind a full decentralized world?
We dont live in a perfect world so there will always be pros and cons, ALOT is going to change over the years and I am sure we will work it out, sometimes when you been in crypto for a few years you forget how early the technology is, there will be many mistakes on the (Luna) but it will make it better.
I mean is radix really decentralized now if a few whales own most of the tokens ? I think the network as its got nodes all over the world but maybe the token supply is not that much for now. I mean we will never have perfect decentralization
Great question. Whales more power to a single individual centralization of power.
Decentralization is cool, but as you said, we dont live in a perfect world, and one con of decentralization is that defi code can also be buggy or fraudulent. You should always DYOR so as to trust trust only the right names.
Yes true but with Radix library of code this should solve the matter of bugs, most bugs because it would have been tested and used in a number of applications , one thing that worries me is lets say 5 of the biggest radix whales get together and vote for something, they would be able to against half the community, thats not a fair vote or system in my eyes.
Nowadays decentralization practically means “out of centralized, government-handled parties”. Like we want everything to be controlled in the crypto network without a third party. Thats what most of us associates now if we hear this term, and we see that it can happen pretty soon. Though I agree with you all that if the power is in the whales of hands, decentralization is not fully happening here.
As of now, I am happy with the situation where we only need to worry about the power of whales, it would still be a step forward from the current situation.