Decentralization Metrics

Decentralization metrics are quantitative tools used to assess the degree to which control and power are distributed across a blockchain network. These include measures like the Nakamoto Coefficient, which calculates the minimum number of nodes required to compromise a network, and Gini coefficients for token holdings.

These metrics are used to evaluate the resilience of a protocol against censorship, collusion, and single points of failure. As regulatory scrutiny increases, projects are under pressure to demonstrate verifiable decentralization to avoid being classified as centralized securities.

These metrics provide the empirical evidence needed to substantiate claims of true decentralization.