Input Output Global (IOG), the builder of the decentralized finance (DeFi) cryptocurrency project Cardano (ADA), has unveiled the world’s first blockchain decentralization index.
The tool, dubbed the Edinburgh Decentralization Index (EDI), is a partnership between IOG and the University of Edinburgh that aims to establish a transparent mechanism for rating the decentralization level of public blockchain initiatives, IOG said in a blog post published on November 18.
Notably, the EDI will work as a live tracker backed by continued ‘calculated and reviewed methodology’ under the supervision of a team from the University of Edinburgh.
How the EDI works
In establishing a project’s decentralization level, the EDI will reportedly focus on risk factors associated with the crypto space. According to IOG, the decentralization review process seeks to consider crypto market volatility and innovations in the blockchain space.
According to Cardano founder Charles Hoskinson, establishing the index is part of an initiative aimed at empowering users and investors,
“Decentralization is at the heart of what makes blockchain technology so unique and so potentially revolutionary. By decentralizing a system, we’re putting power back into the hands of everyday users and investors. What we’re currently missing is universally accepted industry standards which define to what extent projects are decentralized,” said Hoskinson.
In the end, the EDI seeks to preserve the principles of blockchain technology, promoting transparency, censorship, resilience, and integrity as benefits of decentralization.
Over the years, most projects launched in the crypto sector have been marketed as decentralized with no specific industry measure. In this case, IOG stated that the EDI could lay the groundwork for classifying cryptocurrency projects.
Hoskinson’s frustrations
At the same time, as per a Finbold report, Hoskinson expressed his frustration on projects rated as decentralized, yet they carry centralization principles.
“I am tired of being in an industry where every single person says; we’re decentralized. What does it mean? We don’t have a way of measuring. It’s like saying we’re performant. <…> These are just puffery. These are just words. The problem is that decentralization is a measurement of resilience. It’s a measurement of control. It’s a measurement of reliability, and it is incumbent in the way that protocols are designed,” he said.
In this case, Hoskinson noted that decentralized projects should be rated on metrics guided by resilience, control, and reliability.
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