Centralized Dependency

Definition ∞ Centralized Dependency describes a situation within a decentralized system where a critical function or component relies on a single, central entity or point of control. This reliance contradicts the core principles of decentralization, introducing vulnerabilities such as censorship, single points of failure, or potential for manipulation. Such dependencies can exist in oracle services, cross-chain bridges, or governance mechanisms, undermining the resilience of the overall system. Addressing these dependencies is crucial for achieving true decentralization.
Context ∞ In the realm of blockchain and decentralized finance (DeFi), news often highlights the risks associated with centralized dependencies. For instance, a DeFi protocol relying on a single price oracle for external data presents a critical vulnerability if that oracle is compromised. The discussion frequently revolves around efforts to minimize these points of control through the implementation of more distributed oracle networks or multi-signature governance structures. Reducing centralized dependencies is a constant objective for enhancing the robustness and security of decentralized applications.