Distributed liability describes a model where responsibility for outcomes or risks is shared across multiple participants within a decentralized network. Instead of a single central entity bearing all accountability, the collective network assumes obligations. This dispersion of risk is a core tenet of many blockchain and decentralized finance protocols. It aims to prevent single points of failure and promote collective oversight.
Context
Discussions surrounding distributed liability frequently appear in news concerning decentralized autonomous organizations and DeFi protocols. The legal and regulatory implications of this shared responsibility remain a complex and evolving area. Incidents involving smart contract exploits often bring the practical challenges of assigning and managing distributed liability to the forefront.
This research maps DLT governance vulnerabilities, revealing how design flaws enable centralization and exploitation, crucial for building truly secure decentralized systems.
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