I had this thought after my X feed being flooded with pump fun tweets.
“How much decentralization enough, can we ever achieve true decentralization?”
To address that we need to understand what the spirit of decentralization is. It started with bitcoin, a crypto currency. Today it’s called the Gold of the web3 world. But decentralization isn’t just limited to crypto currencies, the true spirit of decentralization is there is no central authority who takes a decision or controls. The power is spread out evenly (let us consider it’s even for now, but it isn’t always the case) and everyone who is a participant of a particular protocol can have their fair share of say while making a decision.
But why do we need decentralization, the simple answer is freedom.
But, But, But …. as spiderman used to say
“ With great power comes great responsibility”
It’s quite similar with freedom. We want freedom but that doesn’t mean we can do whatever we want, however we want. There is always a moral obligation if something is right or wrong.
Pump fun basically took away all the restriction and gave users power to do whatever they want. Literally whatever they want. If you don’t believe me just take a look at homepage of Pump fun. Ranging anything from gun violence to shit coin where people are shitting on live stream, to torturing people live. And probably anything you can imagine, “ANYTHING”.
What is the importance of authority and control? To answer this, ask yourself
What is the importance of parents in the life of a kid? To put it down in simple words it’s, to give a sense of what is right and what is wrong. So is the importance of authority.
After looking into codebase of 10+ protocols in audit contest, everywhere there’s some ADMIN power, so if one person or a group people has unilateral control of critical functionalities of a protocol, is it true decentralization?
Yes and No, but probably no. The idea of freedom is pseudo freedom, freedom doesn’t mean we start doing whatever we want, going live online and doing criminal activities for “FUN”.
In reality there is nothing as true “true” or better to say everything is not in black and white, it’s always grey. Similarly the idea of decentralization is too, we want pseudo decentralization not pure decentralization. Yes, the code is open source and all transactions are freely visible on the blockchain. But companies don’t share their private keys of vaults and wallets online otherwise anyone will drain it. That’s the reason the critical functionalities of the codebase is secured with ADMIN access and the “ADMIN is trusted” yes we all take it with a grain of salt.
What if we suddenly wake up and see Vitalik just shut down ETH and took all the money and ran away to Cayman islands ? well practically it’s a “distributed ledger” and “turning off one system won’t affect the whole blockchain, every other system will have a copy”. But funds are stored in a wallet, that we all agree right? when we put money in any protocol we are basically transferring tokens from our wallet to the protocol’s wallet with the hope that “they won’t run away with our tokens”. But they probably can, that’s what SBF did in case of FTX.
To conclude, decentralization is important but true decentralization is not possible. Because it’s important to have a certain authority and control be in over anything. However, I might be partially wrong because I took pump fun as an example.