Measuring Decentralization in Emerging Public Blockchains
Yongpu Jia, Changqiao Xu, Zhonghui Wu, Zichen Feng, Yaxin Chen, Shujie Yang
Abstract
Bitcoin and Ethereum have always been the two major heavyweight infrastructures in the blockchain space. However, Low throughput and high cost hinder their further development. Recently, some emerging public blockchains have become popular. They all have efficient transaction confirmation mechanism and cheap interaction costs. However, the advantages are actually a sacrifice of decentralization. As we all know, decentralization is an essential feature of blockchain. Therefore, it requires the conceiving of up-to-date metrics of decentralization measurement. However, there is little research on the degree of decentralization of these emerging public blockchains in the past. This paper studies nine popular public chains such as Binance Smart Chain, Cardano, and Avalanche. Since these public chains mostly use the consensus mechanism of POS variants, the distribution of governance token balances on the chain can reflect the decentralization of the blockchain. Hence, We evaluate the distribution of the token balance of those public blockchains to indicate their decentralization degree. Two kinds of indicators are adopted and redesigned: information entropy and Gini coefficients. Among the nine public blockchains we selected, Cardano, Tron and Polkadot have a higher degree of decentralization, while Elrond and Binance Smart Chain have a lower degree of decentralization. We think our work will be helpful for future research on the degree of blockchain decentralization.