Centralization is not always a bad thing. When a country goes to war, for example, centralized control is required to coordinate its forces and direct resources where they are needed most. In web3, however, developers are fighting a very different battle. Its enemy is centralization and the abuses of power that it allows. His solution to the overreach of centralized forces is to counter it with a strong opposing force: decentralization.

It may be an oversimplification, but web3 proponents are creating an alternative system that is everything the centralized web is not. They crave greater privacy, more control over their data, and greater certainty of access (i.e. not deleting the platform). These are just some of the benefits that web3 systems can offer. But if they’re going to realize this great promise, they need to be completely decentralized from the base layer all the way.

Decentralization as a service

Decentralization is often thought of in terms of thwarting attacks by governments and tech monoliths. But censorship resistance is about more than just keeping rival organizations at bay: it’s also effective at improving access. When fully decentralized, with a sufficient number of distributed nodes storing data and transmitting transactions, web3 applications can boast higher uptime than their web2 counterparts.

But all this is just philosophizing if there is no solid foundation that could provide a high level of decentralization. In the case of blockchain networks, that means designing a protocol whose validators or miners cannot collude to censor transactions. However, as post-merger Ethereum has shown, networks do not always trend towards greater decentralization over time.

With more than 60% of all Ethereum blocks now OFAC compliant, there is evidence that it is possible for a blockchain to regress in terms of resistance to censorship. You can still confirm a non-compliant Ethereum transaction, but it will take a few minutes to add it to a block. Hardly what financial freedom is made of. Move further up the blockchain stack and progressive centralization persists. Fortunately, it’s not all doom and gloom.

Not all RPC providers are the same

Between the base layer of the blockchain and the layer of the consumer-facing application are the companies in charge of serving the dApps their data. RPC providers provide the nodes that connect the crypto services to the network of your choice. This could be Ethereum; any of the dozens of other chains that use EVM; or networks with their own machine languages, such as Polkadot and Solana.

RPC providers like Infura and Alchemy are household names in web3; a large part of the DeFi landscape relies on its APIs, which provide users with blockchain data on demand. But as a series of scandals last year demonstrated, these gatekeepers to the decentralized ecosystem are prone to engaging in the kind of practices that represent everything that’s wrong with web2.

Discontent with pseudo-decentralized RPC services peaked with the recent revelation that Consensys, the parent company of RPC provider Infura and web wallet MetaMask, was storing far more user data than it was entitled to. As the scandal progressed, Consensys tried to allay fears by reversing its privacy policy, but the damage had already been done.

At the height of the hoopla, “true” decentralized infrastructure providers like Ankra they sought to put distance between them and Infura. Ankr went to great lengths to emphasize that it does not correlate wallet transactions to IP addresses or use its RPC to execute transactions in the form of MEV exploitation. It is one of the few RPC providers that can claim to offer full or similar decentralization.

One positive that came out of the Infura IP registry debacle is that it prompted web3 users to be much more picky about the RPC they connect to in their web wallet. string list has gone so far as to provide a privacy score for each of the RPCs it offers for various EVM networks, making it easy to calculate the likelihood that your data will not be logged or shared.

moving up the stack

Decentralization at the protocol level is important, but there is no point in building a solid foundation if the house is made of straw. Decentralized apps are only as resistant to censorship as the app store that hosts them. In the case of mobile apps, this means trusting Google and Apple to play fair, something they do less and less.

Apple in particular, with its insistence on claiming 30% of all in-app sales, has removed web3 apps that feature built-in wallets, forcing developers to either release wallet-neutralized versions for iPhone users or keep their best features for the Solo desktop build. It’s not ideal from a user experience or from a mass adoption perspective.

Short of building an entirely new smartphone with its own app store (something Elon Musk has threatened to do), it’s hard to see how mobile dApps can achieve full decentralization while working to Apple’s rigid app store criteria. .

In 2023, will we see more developers embrace decentralization and privacy when creating their dApps? For the sake of DeFi, web3, and end users, we can only pray. Otherwise, they risk rebuilding the current internet, glitches and all, on a chain basis. And nobody wants that.

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