Thread by @Soorajksaju2

#Ethereum Community often calls themselves #Decentralization maxis

But if we look at the real metrics

#Cardano is far ahead than #Ethereum on #Decentralization

Here are the reasons why #Cardano is the most decentralized PoS-based blockchain out there🧵👇

#Decentralisation is the core ethos that gives meaning to the public #Blockchain space

Because it eliminates the need for trusted parties

#Bitcoin initiated this movement in the backdrop of the 2008 financial crisis

Resulted from the corrupt banks & lack of transparency

That's why #Decentralization is the one core principle

That no Layer 1 blockchain should compromise

Compromising on #Decentralization takes away the whole value proposition of public blockchains

Now let's move to the facts and metrics comparing #Ethereum and #Cardano

For comparing #Ethereum & #Cardano

We are looking at five metrics that are relevant for a PoS-based #Blockchain:

▪️Staking ratio
▪️Initial coin distribution
▪️Nakamoto coefficient (MAV)
▪️The total number of Validator nodes
▪️Individual wallets participating in staking

So let's start with

▪️Initial coin distribution

Both #Cardano and #Ethereum had a fair token distribution

This shows the similarities in the fundamental ethos of these blockchains

at the beginning

Now let's look at the participation in the staking of both #Ethereum and #Cardano

There are primarily two metrics that reflect the participation in the staking

▪️Staking ratio and
▪️Individual wallets participating in staking

But before we get into those metrics,

it's essential to understand some of the fundamental differences between the

PoS-mechanism of both #Ethereum and #Cardano

So let's dig in

In Cardano,

you have a choice to run your own validators

or you can delegate your $ADA to the validators you prefer.

As Cardano has no locking periods, you can restake your $ADA anytime you want

In Ethereum, things are a bit different

#Ethereum does not give you a choice

You can participate in Validation if you have a minimum of 32 $ETH,

or you have to depend upon centralized/permissioned staking providers like Lido, Coinbase, or Kraken to earn a yield

It's also important to remember that the staked $ETH is locked for an indefinite period

And you cannot unstake your $ETH at will

These factors have immense downstream implications on the participation

and thereby the #Decentralization of the system

▪️Staking ratio

Here we can see the contrast between both chains

regarding the degree of participation of total tokens in circulation in the staking, a.k.a Staking ratio

#Cardano has a staking ratio of 71%

Whereas #Ethereum has a staking ratio of 13%

Now the next metric

▪️Individual wallets participating in staking

So how can we compare Cardano and Ethereum under this category?

The total number of individual staked wallets of Cardano could be compared to the total number of "Unique Depositors" in Ethereum

So here are those numbers

Where we compare the total number of

Individual wallets participate in the staking mechanism of both Cardano and Ethereum.

#Cardano has 14x more participation than #Ethereum

pro.nansen.ai/eth2-deposit-c…

datastudio.google.com/u/0/reporting/…

It's vital to notice that those Cardano wallets are participating in staking at the L1 protocol level

But most Ethereum wallets participating in staking depend on a third party

Leading to flourishing centralized staking providers

and centralization of the #Ethereum network

As we have gone through the metrics determining the decentralization of token and stake distribution

Now let's take a look at the

#Decentralization of the networking layer of both #Ethereum and #Cardano👇

▪️The total number of Validator nodes

This is where the fun starts

#Ethereum claims to have almost half a million validators

That's many multiple of the total validator number of all other blockchains combined

What's the truth?

Does "Validator" mean "Validator nodes" ?

Validators are defined as network nodes that operate in Proof of Stake (PoS) blockchains

also validating transaction blocks to the blockchain

This definition fits all other blockchains except #Ethereum

For #Ethereum

"Validators" do not mean validator nodes

So, what is it?

When they say "validators" in #Ethereum

What they mean is "attestors."

An attestor is not a node, and it does not validate any transactions

So, in the #Ethereum networking layer, there are two entities

1. Validator nodes

2. and Attestors

In #Ethereum,

A validator node can run any number of attestors

#Ethereum protocol is optimized to maximize the number of attestors

The hardware resources for running multiple attestors are meager

Sometimes there could be 1000 attestors behind a single node.

This is what happens in #Ethereum staking

Attestors supply the stake to the validator nodes

Validator nodes create and validate blocks

Attestors simply agree on the order of transactions,

which is already determined by the validator node to which they supply their stake to

So,

There are 480K attestations happening on Ethereum

But that is very different from validation.

So calling attestors "Validators" is a propaganda tool at the protocol level

Because sites like stakingrewards.com show these numbers under the number of Validator nodes

Which is false information

So what is the exact number of validator nodes?

Now we know that there are no 479240 validators participating in the consensus of #Ethereum

So let's look at the actual nodes in the network

This you can find by looking into the networking layer of #Ethereum

etherscan.io/nodetracker#co…

We have found the number of Validator nodes

Let's compare the number of nodes of #Ethereum & #Cardano

#Ethereum has around 9000 nodes (numbers that Etherscan shows can vary at times)

Whereas #Cardano has around 3200 validator nodes

3x more validators

But there is a catch!

The decentralization of the validator nodes in a PoS blockchain is determined by

The Nakamoto coefficient or MAV (minimum attack vector)

MAV is the minimum number of how many independent parties have to collude to have that 51% control of the network.

Currently,

#Cardano has a MAV of 24, and #Ethereum has a MAV of 3

This shows that the #Cardano networking layer is eight times more decentralized than the networking layer of #Ethereum

Considering all the five relevant metrics:

▪️Staking ratio
▪️Initial coin distribution
▪️Nakamoto coefficient (MAV)
▪️The total number of Validator nodes
▪️Individual wallets participating in staking

#Cardano is far more decentralized than Ethereum or any other PoS blockchains

TL;DR

▪️There are no shortcuts for a #decentralized Layer 1 #Blockchain

▪️ #Cardano is methodically building the most decentralized & secure blockchain

▪️ #Ethereum is taking the "move fast and break things" approach

▪️& that is compromising #Decentralization of #Ethereum

That's a wrap!

If you enjoyed this thread:

Follow me @Soorajksaju2 for more educational content like this

And we are going live tomorrow with our Youtube channel

So please support us by subscribing 👇
youtube.com/@thisweekincar…

If you like Threads like this, you might enjoy our weekly newsletter: Just The Metrics.

A 5-minutes, easy-to-understand newsletter about crypto fundamentals to stay up to date & be better crypto investors 📈

Subscribe here👇
…st-the-metrics-newsletter.beehiiv.com