In the last issue, we talked about: governance mechanisms, which determine whether rules can be changed and who has the final say. However, whether one can participate in governance often depends on whether you have a "ticket," and this "ticket" essentially is your Token.
Therefore, the fifth key dimension to determine whether a chain is decentralized is: Token distribution. Tokens are the "power credentials" of this chain. They determine whether you have the right to participate, the right to speak, and even whether you can receive economic incentives.
But here’s the question: Who exactly receives the Tokens?
Are they highly concentrated among the project team and large holders? Are they distributed to real users in a reasonable manner? These factors will directly affect the power structure of the chain.
How do we judge this? I suggest looking at it from three aspects:
1. Check the initial allocation ratio
For example, look at its white paper or the Token economic model on its official website. Is there a public explanation of the early distribution method, such as how much goes to the team, how much to VCs, and how much to community airdrops?
If at a glance, 80% is allocated to the project team or investors, then it basically loses the foundation of decentralization.
2. Check on-chain holding distribution
You can use on-chain analysis tools, such as blockchain explorers or DeBank, to check the number of holding addresses, the proportion of holdings among the top ten addresses, and whether there is a significant "whale concentration."
If the top few addresses hold most of the Tokens, then your few votes in governance will have little significance.
3. Look at whether the distribution mechanism is fair
How are Tokens distributed? Is it public and transparent? Are ordinary users able to obtain them through airdrops, mining, community activities, etc.? Is there a long-term and continuous release to the community?
Some projects claim to be "community-first," but in practice, most Tokens are allocated to early teams and investors, leaving the community with only a small portion; even if a lock-up period is set for private placements, it does not change the fact of excessive power concentration.
Ultimately, Token distribution is the "distribution of power" in the real world. It determines whether the voices on this chain can be heard by the majority and whether it can prevent monopolization by a minority.
If the rules are open, nodes are free, the code is transparent, and governance is participatory, but ultimately ownership and incentives are held by a very small number of people, then it is also difficult to call it truly decentralized.
Thus, we have covered the five dimensions to judge whether a chain is decentralized: node thresholds, consensus mechanisms, open-source code, governance mechanisms, and Token distribution.
In the next issue, we will summarize—how to quickly assess the degree of decentralization of a chain using these five dimensions in practical operations.
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