{"id":107873,"date":"2023-10-02T10:32:20","date_gmt":"2023-10-02T10:32:20","guid":{"rendered":"https:\/\/wp.dash.org\/?p=107873"},"modified":"2023-10-03T08:37:37","modified_gmt":"2023-10-03T08:37:37","slug":"nakamoto-coefficient-of-dash-platforms-tenderdash","status":"publish","type":"post","link":"https:\/\/wp.dash.org\/blog\/nakamoto-coefficient-of-dash-platforms-tenderdash\/","title":{"rendered":"Nakamoto Coefficient of Dash Platform\u2019s Tenderdash"},"content":{"rendered":"
A Nakamoto Coefficient is a measure of a blockchain\u2019s decentralization. It\u2019s determined simply by counting the number of entities required to compromise a subsystem of a network, such as the number of collaborating developers required to change the code or the number of colluding miners required for a 51% attack. A higher Nakamoto Coefficient indicates higher decentralization. Some evaluations of Nakamoto Coefficients are only concerned with individual subsystems, while some will add the coefficients of the subsystems together to give a more general measure for the overall network.<\/span><\/p>\n In one of my previous articles, <\/span>Decentralization of the Dash Masternode Network<\/span><\/a>, I briefly discussed the Nakamoto Coefficient of Dash Platform as it pertains to validator consensus. I concluded that the coefficient was 34 because 34 nodes make up \u2153 of a 100-node Tenderdash quorum, and with \u2153 control of a Tenderdash quorum, an attacking entity or group would have the power to halt or censor the chain. While many evaluations go by this metric of simply counting the number of nodes, another, arguably more useful one, is to consider the number of colluding node<\/span> owners<\/span><\/i> required to compromise the network. In other words, what is the minimum number of colluding current masternode whales that would be required to control \u2153 of a Tenderdash quorum?<\/span><\/p>\n Since the writing of that article, the high-performance masternode (HPMN) solution under discussion has been implemented and HPMNs have been renamed to <\/span>evonodes<\/span><\/i>. There are currently 73 active evonodes and the number is growing steadily. Dash Platform is on track to launch within the next few months and the number of evonodes is expected to top out soon after at around 450, due to the <\/span>yield equilibrium mechanism<\/span><\/a> between Core and Platform.<\/span><\/p>\n Community members XKCD and Demo are working to incorporate evonode tracking into <\/span>mnowatch.org<\/span><\/a>, with some statistics already available. On the <\/span>Classifications<\/span><\/a> page, which associates masternodes to single entities, if you click on an entity, you can see how many of their nodes are evonodes. None of the top 10 whales have any evonodes. The 12th largest masternode whale, <\/span>Crowdnode<\/span><\/a>, is the largest evonode whale with 15. The next largest evonode whale, <\/span>euvo<\/span><\/a>, has 5. There are two more entities, <\/span>qwizzie<\/span><\/a> and <\/span>twotimes<\/span><\/a>, who have 2 evonodes each, and the remaining 49 are mainly held by unidentified entities. \u201cUnidentified\u201d means they almost certainly don\u2019t have many masternodes, and likely, for the most part, only one evonode each.<\/span><\/p>\n <\/p>\n Current distribution of power amongst evonode entities. Source:\u00a0<\/span>mnowatch.org<\/a><\/span><\/em><\/p>\n Again, with \u2153 control of a Tenderdash quorum, an entity or group would have the power to halt or censor the blockchain. Since \u2153 of 73 is about 24.<\/span>3<\/span>, and it takes a minimum of 5 entities to control that many nodes, this brings the current, projected Nakamoto Coefficient of Dash Platform\u2019s Tenderdash to 5. However, calculating the actual Nakamoto Coefficient won\u2019t be so straightforward, and it will likely be a bit higher because, in reality, Tenderdash works via rotating 100-node quorums, which are randomly selected from the full set of evonodes approximately once every hour.\u00a0<\/span>Since there aren\u2019t enough evonodes to form quorums<\/span>, first of all, Tenderdash wouldn\u2019t even work yet. F<\/span>urthermore, assuming a total of 450 evonodes, the chances of an entity getting all their evonodes into the 100-node quorum, even if they have 34, are practically never 100%, due to the rotation factor.<\/span>\u00a0Bear with me\u2026<\/span><\/p>\n Say there are 450 total evonodes and the largest evonode whale controls exactly 34 evonodes. Technically, the Nakamoto Coefficient<\/span>\u00a0would be 1 in this case<\/span>, going by the previous logic. However, the chance that all 34 of their nodes will be selected for any given quorum is 0.000000000000000000000038% or 3.8 E-23%. Basically, it\u2019ll never happen, so it\u2019s unfair to say that the Nakamoto Coefficient would be 1,\u00a0<\/span>when in the case of other blockchains\u2019 consensus mechanisms (I\u2019m not aware of any who rotate quorums like Tenderdash), the validator set is always the same, so the percent chance of an entity gaining \u2153 control of the set if they have \u2153 of the nodes is always 100%.<\/span><\/p>\n So the question arises: what percent chance of being included in a quorum should we consider for our determination of the Nakamoto Coefficient of Tenderdash? Well, you only need to gain \u2153 control of a quorum one time to compromise the network, so having a 100% chance of being included in any given quorum is too high.\u00a0<\/span>0.0001% is too low because, in that case, there\u2019s only about a 1% chance that the attacker(s) will gain \u2153 control of a quorum even once in any given year.\u00a0<\/span>I\u2019m going to venture to say that, under the current design, having a<\/span>\u00a00.01%<\/span>\u00a0chance<\/span>\u00a0of gaining \u2153 control of any given quorum<\/span>\u00a0is a fair place to compare Tenderdash consensus with the others, because at that point, the entity or group would have a 65% chance of gaining \u2153 control of a quorum once per year, so we could expect it to happen about once every two years. Further context on why I think this is a good threshold is explained in the next section, but basically it\u2019s already extremely unlikely that an entity or group would be\u00a0<\/span>malicious and actively looking for their chance to halt the chain, and considering that, just having the chance any less than once every two years I argue is negligible.<\/span><\/p>\n <\/p>\n To have a<\/span>\u00a00.01<\/span>% chance of gaining \u2153 control of any given quorum, again assuming 450 total evonodes, an entity or group would need to control 90 evonodes.\u00a0<\/span>If<\/span>\u00a0the current top two masternode whales convert\u00a0<\/span>all<\/span>\u00a0499 of their combined masternodes to evonodes, they\u2019ll have 124, making the hypothetical Nakamoto Coefficient 2. However, it\u2019s doubtful we\u2019ll see them do so,\u00a0<\/span>mainly due to the\u00a0<\/span>yield equilibrium mechanism<\/a><\/span>\u00a0and the unlikelihood of them purposefully attempting to harm the project they have such large stakes in<\/span>. A more<\/span>\u00a0likely scenario is if the top whales convert something like\u00a0<\/span>one-fourth<\/span>\u00a0of their current masternodes to evonodes, in which case the Nakamoto Coefficient would hypothetically become 16. Regardless, these numbers remain speculation until we actually get over 100 evonodes and Platform launches on mainnet, at which time we can revisit the topic and get a hard number.<\/span><\/p>\n <\/p>\nPlatform Progress<\/span><\/h2>\n
Tenderdash Quorums<\/span><\/h2>\n
Percent chance of gaining \u2153 control of a Tenderdash quorum<\/span><\/h3>\n