Bitrabo Editorial
Justin Bons, the creator of Cyber Capital, has strongly criticized Cardano, alleging that the Ethereum competitor is centralized. Venture capitalists argue that this high level of centralization at the protocol level poses a significant vulnerability for the proof-of-chain blockchain.
Founder’s View: Centralization Issue of Cardano
According to Bons, there is a concern with Cardano’s genesis keys, which are a multi-signature system granting control over core protocol rules. The VC stated that these keys grant excessive power to Input Output Global (IOG), the company behind the smart contract platform.
This problematic centralization came about during Cardano’s third phase of development, Shelley, where these keys were incorporated as a permanent part of the network design. Initially, IOG did not have full power over the genesis keys. However, when the Cardano Foundation delegated its control to the developer, IOG gained control.
Bons claimed that IOG controls five out of the seven genesis keys, enabling them to unilaterally modify the protocol without community consent. This contradicts Cardano’s assertion of being highly decentralized compared to Ethereum. The power wielded by IOG through these keys could potentially be exploited to disrupt the network, impacting the processing of blocks or distribution of ADA to validators.
The unmistakable centralization can be observed in Cardano’s deliberately gradual development approach in comparison to competitors like Solana. Cardano is still undergoing refinements, with IOG planning to boost efficiency once Voltaire is implemented.
Impact of Voltaire on Decentralization Levels
Public blockchains like Ethereum and Bitcoin are inherently decentralized, with validators ensuring transaction censorship resistance even during severe disruptive incidents. This feature sets them apart from centralized alternatives and fosters widespread adoption.
The resolution to Cardano’s centralization issue lies in the upcoming development phase, Voltaire, where on-chain governance will be introduced, rendering the use of Genesis keys obsolete.