The article discusses the importance of decentralization in the context of blockchain technology and web3 protocols. The authors argue that decentralization is the key innovation enabled by blockchain technology, driving the creation of a democratized internet. They identify three types of decentralization: Technical, Economic, and Legal, and suggest factors relevant for each type in the context of tokenized blockchain protocols and tokenized smart contract protocols. The authors also provide comprehensive tables enumerating the components of decentralization, aiming to provide a more concrete and standardized definition.
- Understand the three types of decentralization: Technical, Economic, and Legal. Each type has its own unique factors and influences the overall decentralization of a web3 system.
- Consider the totality of circumstances: When analyzing the decentralization of a blockchain protocol or smart contract protocol, it’s important to consider all relevant factors and circumstances.
- Use the provided tables: The authors provide comprehensive tables that enumerate the components of decentralization, which can be used as a guide for understanding and assessing decentralization in web3 systems.