Centralized control risk pertains to vulnerabilities that arise when a single entity or a small group of entities possesses disproportionate authority over a system or asset. In digital assets, this can involve control over a blockchain network’s consensus mechanism, a project’s development roadmap, or the custody of user funds. Such concentration of power can lead to censorship, manipulation, or introduce single points of failure. This risk directly contradicts the decentralization ethos common in many crypto systems.
Context
This risk is a frequent subject in discussions concerning stablecoins, decentralized autonomous organizations, and proof-of-stake networks where validator concentration may exist. News reports often highlight instances where centralized control has been exploited, resulting in security breaches or governance disputes. Mitigating centralized control risk remains a critical objective for fostering resilient and equitable digital asset systems.
A critical delegate call vulnerability in the protocol's administrative multisig allowed arbitrary code execution, leading to unauthorized token minting.
The compromise of a single, centralized Official Keeper's 2FA bypassed the smart wallet's recovery logic, exposing user assets to unauthorized transfer.
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