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Decentralization Risk

Definition

Decentralization Risk is the potential for a blockchain network or decentralized application to exhibit characteristics of centralization, undermining its core principles of distributed control and censorship resistance. This risk can manifest through concentrated mining power, validator dominance, governance token hoarding, or reliance on centralized infrastructure components. Decentralization risk poses a threat to the security, fairness, and long-term viability of a decentralized system. It can lead to single points of failure or manipulation.