Produced by the Polkadot Ecological Research Institute, it must be a boutique (the article is very long, it is recommended to collect it first and then read it)

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Produced by the Polkadot Ecological Research Institute, it must be a boutique (the article is very long, it is recommended to collect it first and then read it)background。

About a week ago, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the well-known Crypto protocol Tornado Cash and dozens of related Crypto wallets, and even the well-known stablecoin USDC was also affected. turmoil.

Some people may wonder why a blockchain protocol can attract the attention of US regulators. The reason is that,

The function of Tornado Cash is to hide the address transaction information in the blockchain network through a "pool", so it is not easy for regulators to track the source and whereabouts of funds

Hacker theft often occurs in the Crypto field. After the funds are obtained, they will use the Tornado Cash protocol to carry out so-called "coin mixing" to remove the suspicion of being tracked.

According to the information disclosed on the official website of the U.S. Department of the Treasury, since its establishment in 2019, Tornado Cash has been used for more than $7 billion in Crypto-related money-making activities.

It is precisely because of its huge amount of funds that it has attracted the attention of regulatory agencies, so there was news of being sanctioned by OFAC a week ago.

The sanctions against Tornado Cash have caused a lot of discussion. After all, Tornado Cash itself is just a technical agreement. Whether it should be convicted and whether related DeFi products should be banned has attracted our attention. Therefore, this article will start from this incident Speaking of which, let’s discuss some developments of the blockchain in the future.

Market reaction mixed after sanctions

Various sanctions followedThis is the first time that the United States has approved sanctions on the DeFi protocol on the chain, and it can also be said to be the most severe sanctions in history. After OFAC imposed sanctions on Tornado Cash, some DeFi protocols also began blocking all users who had previously received funds from Tornado Cash addresses.

For example, the front-ends of the well-known decentralized lending protocols Aave and DEX Uniswap have successively banned addresses that received transfer pollution from Tornado Cash-related addresses.

Some blockchain infrastructure providers have also made corresponding sanctions

. Blockchain infrastructure providers Infura and Alchemy are blocking RPC requests to Tornado Cash.

The team at the decentralized RPC network Pocket Network is taking steps to ensure compliance, including banning interactions with several addresses associated with Tornado Cash.Two days after the U.S. sanctioned Tornado Cash, the Dutch Fiscal Information and Investigation Service (FIOD) made the arrest. On August 14, Dutch police confirmed that they had arrested a 29-year-old in Amsterdam in connection with Tornado Cash "allegedly exploiting personnel".。

“The suspect sought to conceal criminal financial flows and facilitate money laundering by mixing Crypto via Tornado Cash, a decentralized Ethereum mixing service,” FIOD said in a statement.

According to Cryptoslate, a member of the Tornado Cash team said in an interview,

The Tornado Cash DAO Has Been Shut Down Because It 'Can't Stand Against the U.S.' and Contributors Are Fearful of Being Sued

Everyone is talking about decentralization

The subsequent sanctions against Tornado by many DeFi and infrastructure, as well as the arrest of developers suspected of participating in Tornado Cash by Dutch regulators, have sparked discussions among many developers and those engaged in the encryption industry.

On August 12, Ryan Sean Adams, the founder of Mythos Capital and Bankless, tweeted about two hours after the arrest was revealed that the suspect may have written "public product code for maintaining people's online privacy." "They put a guy in jail because bad guys used his open source code. That doesn't hold water in any free society."

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Adam Cochran, partner at Cinneamhain Ventures, also sees the arrest as an invasion of privacy: "Code is freedom of speech. Unless there's more to this story, arresting someone for developing an abused privacy tool is a crazy overreach by the government." Behavior."The same sentiment was echoed by Aave founder Stani Kulechov, who tweeted that being arrested for writing privacy-preserving code is not normal: "This arrest makes all privacy/encryption developers a target. are using privacy tools online."

On August 13, Stefan George, the co-founder of Gnosis, posted on social media that the arrest of the developer of Tornado Cash reminded him of Phil Zimmerman, the inventor of PGP (Excellent Confidentiality Agreement). He was investigated for three years in the United States for violating relevant laws, but was not prosecuted in the end.

Privacy is not only the personal needs of users, but also the key to decentralized finance, and the function of Tornado Cash to confuse transactions achieves truly anonymous transactions

, the user's privacy is guaranteed, but it also makes it one of the preferred tools for criminals to make money.

As Stefan George said, technology is neutral. People need privacy, and sanctioning privacy tools is obviously not the best way. Arresting developers is like arresting the maker of a watermelon knife. The knife itself is neutral, and the perpetrator should be arrested, not the developer of the tool. By.How should we understand decentralization?

Although we have seen many discussions around "decentralization", there may still be some friends who are not clear about what decentralization is. Here we borrow V God's explanation of decentralization to briefly explain An overview of how to understand decentralization can make it easier to understand the current situation of these blockchain projects.

The decentralization proposed by V God mainly has three dimensions: architectural decentralization, governance decentralization, and logic decentralization

Because the blockchain is that the codes run by each node are consistent, and everyone realizes the blockchain together, so it is logically consistent.

Governance decentralization is looking at how many computers that make up the system are controlled by one person or organization at the same time? Decentralized governance means that no single center can control the entire system at will.

The decentralization of the architecture mainly depends on how many physical computers a system is composed of? How many simultaneous computer failures can it tolerate at a single time?pictureDecentralization of the architecture means that the architecture of the entire system is not concentrated in one place, but distributed, so that it will not encounter the risk of centralization brought about by some centralized layouts.

It should be noted here that if only the structure is decentralized, this is only a distributed structure, and it does not mean that the governance is decentralized.

Because the storage behind Baidu Cloud Disk is also a distributed structure, but there is a centralized subject that can control the content stored in it at will

, This is a decentralized architecture but centralized governance.

The decentralization we usually refer to refers to the two dimensions of architectural decentralization and governance decentralization that the blockchain possesses.

How to understand the current blockchain projects?

Based on V God's decentralization logic, let's take a look at the current situation of blockchain projects.

From the perspective of the public chain, BTC belongs to decentralized governance, because the inventor Satoshi Nakamoto chose to disappear and did not intervene in the direction of the project. At the same time, BTC has tens of thousands of nodes around the world, but due to the existence of mining pools, BTC Architecturally a bit less decentralized, though some mining protocols are addressing mining pool centralization.At the governance level, ETH is a little bit centralized compared to BTC, mainly due to the existence of the spiritual leader and founder V God, who upgrades Ethereum through a method similar to off-chain governance, but the technical upgrade route of Ethereum is basically It follows V God's thinking, so it is slightly centralized.。

In fact, BTC is mainly an attribute of Coin, so there is no need to make any changes, and it is the most suitable project for decentralization at the governance level.

However, smart contract chains such as Ethereum need iterative evolution. It is necessary to have a role like the founder to lead the further development of the project. Fortunately, Vitalik’s positioning of Ethereum is also very decentralized.

Therefore, although he will control the technical trend of Ethereum, Vitalik will try his best to ensure that the governance of Ethereum in other aspects is decentralized

On the one hand, large node service providers such as Infura and Alchemy on Ethereum will become a single point of failure for the entire network of Ethereum due to their large market share.

On the other hand, many Ethereum nodes run on centralized cloud computing servers such as Amazon Cloud (AWS) (50% of Ethereum's managed nodes run on AWS).

During the operation of Ethereum, both of them had some problems, which in turn affected a large number of ecological projects and related applications on Ethereum.

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We can look at public chain projects such as Solana and BSC based on the analysis of BTC and Ethereum, but these projects will at least ensure that they are decentralized on the surface (because without the cornerstone of decentralization, it is difficult to attract More participants enter its ecology), so our focus will be from the application point of view.

From the application point of view, the current largest application is the stablecoin series of assets. Among them, the US dollar stablecoin, which is similar to USDC and other fiat currencies, is a very centralized asset.Because they are issued and managed by a centralized company, the issued stablecoins can be issued and destroyed according to the needs of the company, and even the stablecoins in the hacker's address can be frozen.。

Although this operation prevents hackers from gaining evil benefits, which is a good thing, it also fully reflects its centralization characteristics, which has been criticized by many people who value the spirit of decentralization.

Another big application direction is NFT.

NFT applications can also be divided into relatively decentralized NFT projects, such as CryptoKitties, and decentralized NFT projects empowered or endorsed by centralized entities, such as NBA Top Shot

In addition, where the data of NFT itself is stored is also a big problem. The source files of many NFTs are still stored in the centralized cloud, and such NFTs will also be more centralized.

Similarly, blockchain applications such as DeFi will also have tendencies. For example, some applications will choose to cooperate with supervision to make themselves less decentralized in order to resist some behaviors that are not legally and morally acceptable in the world, such as hacking.

There will also be teams that insist on decentralization. Although the team is managing the iteration and development of the project in a centralized manner, the team will not violate the principle of decentralization and subjectively choose to maintain the decentralization of the project characteristic.

in addition,How do you view the development trend of blockchain in the future?。

①True decentralization must also be based on the decentralization of infrastructure. Nodes are one of the key infrastructures of the blockchain, but these infrastructures will always be controlled by an individual or entity organization, and they may face the supervision and requirements of some powerful powers, thus making the nodes less vulnerable in disguise. decentralized.

in addition,

All blockchains must be based on real computer hardware to meet the storage, computing, network transmission and other network infrastructure required by the network

At present, the entire blockchain industry is still in the early stages of these infrastructure levels. For example, the so-called king-level project FIL in the direction of decentralized storage is still a long way from commercial-level applications, and most nodes still use centralized cloud.

Therefore, there is no public chain that can be completely decentralized at the network infrastructure level.

Therefore, to achieve true decentralization, the decentralization of infrastructure is essential, and this is the only way to go in the future.

Some blockchain public chains may be more friendly to develop or promote in a certain country. For example, they will consider cooperating with many local companies to launch some applications. In this way, there will be the XX chain in South Korea and the XX chain in Japan that we may hear. The so-and-so chain of such statements.

And these chains may be compromised to become a compliant public chain that excludes applications or addresses that regulators do not like in order to comply with local regulations.Similarly, service providers of some applications such as DeFi or some tools, especially those projects whose team members are public, will also face the issue of being regulated, so they choose to take some regulatory actions, such as prohibiting certain addresses from accessing applications, Or freeze certain assets and so on.picture

Where there is light, there is shadow, and decentralization must also be the main theme of the blockchain.

Therefore, many projects will still guarantee their own decentralization attributes, so there may be cases where the project is forked due to differences in community consensus

, or the same type of project, will be differentiated into a compliance version and a decentralized version.

As for whether to choose affinity or choose to maintain decentralization in the face of compliance, there have been signs of differentiation in the industry. It can be foreseen that the development of the blockchain industry in the future will definitely diverge into two different paths. .

③Centralization and decentralization will seek common ground while reserving differences, and integration may be a major trend in the future. Just like the project party will have different considerations to differentiate the compliant version of the project and the decentralized version of the project, users will also have different attributes. Not everyone can accept complete decentralization, and some people will tend to subject to supervision.But it may also happen that users will freely shuttle between the two types of applications according to their needs. Users will choose the former when they want to be protected by supervision, and they will choose the latter when they want to enjoy their own digital assets.。

Therefore, just as the birth of Web2 will not exclude Web1, but will coexist, Web3 will not exclude Web2. Centralization and decentralization are two ways to solve problems, each with its own advantages and disadvantages.

Perhaps for solving some problems, centralization is more advantageous in the part that chooses centralization,

In the part where decentralization is more advantageous, choosing decentralization and giving full play to the respective strengths of the two may be more likely to be the norm in the future, and integration may be a major trend in the future

Where will Polkadot go?①Walking at the forefront of decentralized governance》

Just like when we mentioned smart contract platforms such as Ethereum, we mentioned that their governance is relatively centralized, and they use off-chain governance. On the other hand, Polkadot adopts a more decentralized on-chain governance method to promote the upgrade iteration and development of Polkadot.

For details, please refer to "

Why is on-chain governance so important, and how will Polkadot Gov 2.0 lead the development of on-chain governance?②Thousands of validators program》

In order to be more decentralized at the architectural level, Polkadot launched the Thousand Verifiers Program, which was initiated by the Web3 Foundation and Parity Technologies to use the funds held by these two organizations to nominate verifiers in the community.

The main purpose is to give validators a structured channel to join the set of active validators on Kusama and Polkadot, as well as further decentralize the active pool of validators. For details, please refer to "What is Polkadot's Thousand Verifiers Program? how to apply?。

Previously, Dr. Gavin was answering a question "In the Polkadot ecosystem, besides the two relay chains of the canary network Kusama and the main network Polkadot, do you think there will be more relay chains?", Make a point:

There may be another one or two, and one of the trends he sees is alliance-type chains, that is, chains specially built for industries, enterprises, and organizations.

They may want to unite and communicate with each other, but they don't want to be part of a public chain, and may not feel the need to join another chain's economic system. It is more appropriate to use Polkadot for these chains, because Polkadot will not intervene in all transactions.

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④ Polkadot ecology is promoting the decentralization of infrastructure

postscript

After the DeFi was sanctioned this time, it can be seen that the necessity of decentralization of infrastructure must be a future trend.

Currently, many such infrastructures are being explored in the Polkadot ecosystem, such as CESS, SubSpace, Phala Network, Deeper Network, etc. Polkadot solves chain problems, while these teams are more focused on solving infrastructure-related problems. The Polkadot ecosystem is actively contributing to the decentralization of the industry.

postscript

The aftermath of the decentralization issue caused by regulation is still there. Now, at the critical time when ETH is moving towards 2.0 and transforming into PoS, Ethereum 2.0 beacon chain verifiers such as Lido Finance, Coinbase, Kraken, etc., a total of more than 66% of beacon chain verifiers will comply with OFAC (U.S. Treasury Department) Department of Foreign Assets Control).In this way, it seems that after ETH is converted into PoS, it will become centralized because the nodes are subject to regulatory constraints?Afterwards, Vitalik participated in the discussion on the topic of "how will the Ethereum community react if the verifier nodes of certain protocols (such as Lido, Coinbase, etc.) are supervised to conduct protocol-level review of Ethereum?" Think of this censorship as an attack on ethereum, and choose to have these nodes burned through a wider consensus (social consensus).

. We don't know what will happen to Ethereum despite the strong regulation.

*The information provided by the Polkadot Ecological Research Institute does not represent any investment hints. The published articles only represent personal opinions and are for reference only. Since there are no policies and regulations related to digital assets in China, users in mainland China are requested to pay close attention to the development of Crypto.

Welcome everyone to join our Telegram group of the Polkadot Ecological Research Institute:

https://t.me/polkadot_eri

But the future trend is destined to be an organic combination of centralization and decentralization, and the game with supervision must be an indispensable link in the historical process.

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