The condition for true decentralization is "absolute number".
The scarcity of web3 users is a major obstacle to decentralization.
Good morning.
I am mitsui, a web3 researcher.
Every Saturday, I write a reflection article for the week. If you haven't read any of the articles yet, please take a look when you have time on the weekend!
This week's research articles
This week, I had a few days off due to my trip to Thailand, but I still managed to update four articles, at least one per day. Please take a look!
Top 3 News Stories that Caught My Attention
Apple to Introduce First Web3 Metaverse on "Vision Pro" VR Headset, Leading to Soaring Virtual Currency VR
Victoria VR, a VR development company based on blockchain technology, announced on the 2nd that it will release a metaverse app compatible with Apple's upcoming mixed reality headset "Vision Pro."
In response to this announcement, Victoria VR's VR tokens skyrocketed, reaching a temporary increase of 60% compared to the previous day.
Victoria VR is developing a MMORPG game for virtual reality that utilizes the Unreal Engine and blockchain technology.
Victoria VR's metaverse adopts a system that generates revenue through the use of VR tokens. Half of the revenue obtained from in-game asset sales will be redistributed to VR stakeholders and active metaverse users.
Astar to Launch zkEVM Mainnet in Late February, Revealing Six Initial Products
On the 1st, Astar Network announced the release of the "Astar zkEVM Powered by Polygon" mainnet, which functions as an Ethereum Layer 2 solution, scheduled for late February.
Alongside the release, the launch campaign "Yoki Origins" will also be held.
In this event, over 40 web3 projects, creators, and major companies will participate, providing NFTs in the form of capsule toys. By collecting these NFTs, participants can nurture Astar Network's original character, "Yoki."
EigenLayer Raises Staking Cap, Leading to Rapid Increase in TVL
EigenLayer, an Ethereum-based restaking protocol, announced on February 6th that it would temporarily remove the staking cap.
After the removal of the staking cap, over 1 million ETH was staked in approximately 2 hours, and as of February 7th, the Total Value Locked (TVL) of the protocol has increased to approximately 616.8 billion dollars, equivalent to around 17.6 billion ETH.
EigenLayer is a protocol that enables staking of the token "LST" obtained through the use of liquid staking services.
The True Condition for Decentralization is the "Absolute Number"
I'd like to share some thoughts I've been having recently.
It's not a new phenomenon, but in the world of cryptocurrencies, meme tokens occasionally emerge that increase in value by thousands of times. This can also be the case with games like Friend .tech, but most often, these meme tokens have little to no utility.
While I can't say it out loud because some people end up losing money, the chaos is part of what makes cryptocurrencies interesting and, from an outsider's perspective, quite enjoyable. Some projects in the ERC-404 series, which I plan to cover in tomorrow's article, have increased by 4,000 times in just a few weeks.
I believe there are several reasons why these things happen, and one crucial condition that cannot be overlooked is the "limited number of web3 users."
Due to the low number of participants, the price of cryptocurrencies fluctuates based on the actions of investors, influential influencers, and the general sentiment in the industry. This is something that rarely occurs in the world of "stocks," which are already widely adopted. In the world of stocks, only listed stocks are traded, and there are measures in place such as upper and lower limits to control price movements. Additionally, the number of stockholders is different, so the influence of a single person varies.
While major coins like Bitcoin and Ethereum have seen a significant increase in the number of holders, newly born meme coins often have too few holders, causing the voice of a single person to become disproportionately influential. This leads to criticism that scams occur and only capitalists with influence end up profiting. But that's a discussion for another time.
With that perspective in mind, I've been pondering the importance of "decentralization."
"Decentralization" is achieved through technologies like smart contracts, allowing services to be utilized in a trustless manner. It also enables services to evolve and operate in a DAO-like manner, without a central authority.
However, it is obvious that the difficulty of hacking a DAO differs between a DAO with 100 participants and one with 1 million participants. In extreme cases, a DAO with 100 participants can be controlled freely by rallying 51 or more individuals to join or by accumulating voting rights through purchases.
In conclusion, as the title states, the true condition for decentralization is the "absolute number."
No matter how advanced the technology or the concept may be, decentralized operation cannot be achieved without a sufficient number of participants. That's why mass adoption is necessary. If the absolute number is required for governance, stronger protocols will become even stronger, while smaller, latecomer protocols will face a tough battle. That's the impression I get.
I will continue to research and contemplate the practical realization of these ideologies.
Thank you for reading this week's articles. I will continue to update starting from tomorrow, so please stay tuned!
Disclaimer：I carefully examine and write the information that I research, but since it is personally operated and there are many parts with English sources, there may be some paraphrasing or incorrect information. Please understand. Also, there may be introductions of Dapps, NFTs, and tokens in the articles, but there is absolutely no solicitation purpose. Please purchase and use them at your own risk.
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Author
mitsui
A web3 researcher. Operating the newsletter "web3 Research" delivered in five languages around the world.
Contact
The author is a web3 researcher based in Japan. If you have a project that is interested in expanding to Japan, please contact the following:
Telegram：@mitsui0x
*Please note that this newsletter translates articles that are originally in Japanese. There may be translation mistakes such as mistranslations or paraphrasing, so please understand in advance.