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Decentralization is the cornerstone of blockchain technology, offering heightened security, inclusivity, and resilience by mitigating single points of failure. A notable trend in the blockchain space is the shift towards decentralized Proof-of-Stake (PoS) networks. In the Aptos blockchain, validators play a pivotal role in achieving consensus. These network participants, who run full nodes, actively engage with transactions in the mempool and incorporate them into blocks they sign. This process ensures the scalability, security, and finality demanded by the robust Aptos network architecture.
Nakamoto coefficient: A measure of decentralization in a blockchain network, calculated by taking the square of the number of nodes in the network and dividing it by the number of nodes that control over 50% of the network's mining power.
Gini coefficient: A measure of income inequality in a population, often used in economics.
Lorenz curve: A graphical representation of income inequality, which plots the cumulative percentage of income against the cumulative percentage of the population.
Method:
To assess the decentralization of the Aptos ecosystem over time, various metrics can be employed, including the Nakamoto coefficient, GINI coefficient, Lorenz curve, validator count, and percentage of staked supply.
Nakamoto Coefficient: Originally used to measure the distribution of mining power in a network, where a value of 1 indicates centralization and 0 represents perfect distribution. However, since Aptos utilizes a proof-of-stake (PoS) consensus mechanism, the GINI coefficient is more appropriate for assessing decentralization.
GINI Coefficient: This metric measures the inequality in stake distribution among validators. It is calculated by ranking validators by their stake, plotting the cumulative share of stake against the cumulative number of validators, and then measuring the area between the line of perfect equality and the actual distribution curve. A GINI coefficient of 0 indicates equal distribution, while 1 indicates maximum inequality.
Lorenz Curve: The Lorenz curve is a graphical representation of the distribution of stake among validators. It plots the cumulative percentage of stake held by the bottom x% of validators against the percentage of validators. The curve visually depicts the degree of inequality; the closer the curve is to the line of perfect equality (a 45-degree line), the more equal the stake distribution is. This curve is integral to calculating the GINI coefficient.
Simpler Metrics: These include the count of validators and the percentage of staked supply held by top validators. An increase in the number of validators and a decrease in the concentration of staked supply among top validators suggest a trend toward greater decentralization.
To monitor decentralization over time, data from the aptos.core.fact_changes table can be aggregated monthly. Key metrics like the GINI coefficient, Lorenz curve, validator count, and percentage of staked supply can then be calculated and plotted over time to visualize changes in network decentralization.
Summary:
To track decentralization in the Aptos ecosystem, key metrics such as the GINI coefficient, Lorenz curve, validator count, and percentage of staked supply should be monitored. The GINI coefficient and Lorenz curve are particularly useful for measuring and visualizing inequality in stake distribution among validators. By aggregating data from relevant tables on a monthly basis, these metrics can be plotted over time to assess trends in the network's decentralization.
My dashboard was inspired by Marqu & MoDeFi, from whom I forked some queries to use as a basis for my analysis!
Orig. dashboards: