Decentralization Criteria

Definition ∞ Decentralization criteria are a set of standards or metrics used to assess the degree to which control and decision-making power are distributed within a blockchain network or digital asset protocol. These criteria often evaluate aspects such as node distribution, validator participation, governance mechanisms, and token allocation. A higher degree of decentralization generally indicates greater resilience against single points of failure and censorship.
Context ∞ Establishing clear decentralization criteria is a critical discussion point in both technical development and regulatory assessments of digital assets. Regulators frequently consider the level of decentralization when determining whether an asset constitutes a security. Ongoing efforts aim to standardize these criteria to provide clarity for developers and market participants alike.