How Soon Until We Have A Fully Decentralized Stack?

How Soon Until We Have A Fully Decentralized Stack?

Table of Contents

Crypto is less decentralized than you think. Or to put it differently, crypto is more centralized than you think. From the blockchain networks run on a few dozen AWS nodes to the DeFi protocols equipped with a 2-of-3 “killswitch,” crypto contains enough chokepoints to extinguish all life in an industry that was founded on an ethos of decentralization.

While every new project scam, bankruptcy, and subpoena reinforces the maxim “Don’t trust, verify,” crypto’s feet of clay might not always be permeable. Beneath the surface, those tasked with building the networks, protocols, and bridges that support the entire industry haven’t given up hope of achieving a fully decentralized stack, free of central points of failure, the way Satoshi and the cypherpunks always imagined. 

And they’re not just dreaming of better times: they’re building their way towards a fully decentralized future, one brick at a time.


Defining DeFi

“Decentralized finance” (DeFi) is a broad term that’s routinely used to describe everything from protocols on smart contract networks to the entirety of web3 and non-custodial crypto. What’s indisputable, is that whatever DeFi is, it isn’t centralized. Insofar as possible, it should be free of centralized levers that can be unilaterally controlled or commandeered by cartels. If special interest groups, financial monopolies, or state actors can freeze it, sanction it, or shut it down, it isn’t decentralized: it’s just another piece of decentralization theater.

Decentralization theater is any project, token, or protocol that flies under the banner of non-custodial crypto when in reality it’s as centralized as the Federal Reserve. But to be fair to DeFi projects, the majority aren’t trying to deceive: they’re just constrained by the tools available to them right now, many of which are still tightly controlled by their core team. These teams are working towards decentralization, we’re promised. But when? When is true decentralization?


The Blocks That Make Up a Decentralized Stack

The greatest area of DeFi that needs greater decentralization is storage and data provision. Decentralized applications require fast, reliable, and censorship-resistant access to data on demand, while provisioning as much of it as possible off-chain to avoid blockchain bloat and prevent bottlenecks. The first truly decentralized Content Delivery Network (CDN) is being developed by Fleek.

Fleek’s decentralized edge network provides an alternative to traditional compute and content delivery networks. Because it has no central authority, content delivery is reliable and censorship-resistant. It’s essentially a decentralized Cloudflare, providing on-chain apps with data on demand, minus the presence of a killswitch that centralized providers have routinely used to block content.

There’s more to decentralization than distributed storage of course. Fleek has thought of this, and is developing as a web3 infrastructure solution. Essentially, it will provide all the nuts and bolts that developers need to connect to a CDN to create a blockchain-based platform or application. Storage, computation, hosting, and domains are just some of the products that will eventually offer.

While that pretty much takes care of the middleware required to create truly decentralized applications, what about at the top of the stack, where application meets end-user? Here there’s also innovation occurring, as developers strive to create wallets and distribution platforms that are less centralized than incumbent solutions.

Several of the leading web wallets have caught flak for either their reliance on heavily centralized infrastructure or their excessive data retention policies. Neither of these characteristics is aligned with the underlying ethos of crypto. Already, users in certain geographic regions have seen their IPs banned due to OFAC-compliance fears.

There are also issues with centralized app stores that are extremely reluctant to list crypto-powered apps. Apple’s App Store, for instance, compels developers to release heavily neutered apps that don’t contain a crypto wallet. Greater availability and access to decentralized app distribution stores is required. This too, is being worked on, but there is still more to be done in breaking away from the Apple/Google duopoly that dictates access to smartphone apps.

Slowly Then Quickly

From an end-user perspective, decentralization can be hard to judge. It is after all an amorphous concept that lacks a visible manifestation of its true state. Nevertheless, behind the scenes crypto imagineers are pioneering new solutions that will allow web3 and DeFi to achieve their full value proposition: decentralized, distributed, censorship-resistant, and always available. We’re not there yet, but with each new protocol, network, and application that emerges, the industry is inching closer to achieving a fully decentralized stack.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Related Topics: 

You may like