Ruby Protocol - Decentralization Will Prevail
As a project that tries to offer its share to the crypto movement, it is our natural instinct to follow the vicissitudes of this space. And our observation is that it has been evident, from a pattern across financial regulators and governments, that the subtext in the administration’s policy toward crypto is that it should be choked off.
The list can go on, but the following should suffice to validate our observation.
- SEC Cracks Down on Crypto
- SEC Proposes Rule That Could Squeeze Crypto Platforms
- SEC isn’t backing down on ‘regulation by enforcement’
- Elizabeth Warren is building an anti-crypto army
Forget subtext. It’s now clear and in the interests of regulators to interact with banks and traditional institutions because they are centralized and easy to control. However, you don’t have to read between the lines to know that the absolute risk the crypto movement poses is that this space is now busy creating a system outside of governmental control.
Crypto regulation is going to stop. Governments will be governments. But technological progress is going to continue. And decentralization will prevail.
What It Means to Go Decentralized
Decentralization is more than a catchphrase. Going decentralized and thriving as a protocol takes a lot of work.
For any Web3 protocol to reach its full potential, the infrastructure on which it is built must have fully decentralized data management — which means eliminating or only partially relying on centralized cloud providers such as Amazon Web Services.
Decentralization puts the actual owners in control, and blockchains must be immutable, affordable, and environmentally conscious. So ticking all of these boxes is a big deal.
This is difficult, but the difficulty is irrelevant because the alternative is worse.
On Feb. 9, Coinbase co-founder and CEO Brian Armstrong tweeted a looming event on crypto staking, an essential aspect of crypto. It allows users to participate directly in running open crypto networks and bring scalability, security, and reduced carbon footprints. However, the authorities are keen on shutting it down using the good old catch-all law.
Many people agree with this because they want to remain in the matrix where they are controlled. After all, it is easier. It’s as simple as clicking yes, yes yes, and someone else will handle your problems. It’s all well and good, but this is how you become truly free and prosperous. Taking responsibility, being a sovereign individual, and seeking independence is the path to freedom.
Again, decentralization is difficult, but the difficulty is irrelevant because the alternative is worse.
Decentralization Will Prevail
While Brian Armstrong has stated that he “will gladly defend this in court if necessary,” the Ethereum beacon chain has surpassed 16.5 million staked ETH, accounting for nearly 14% of the total ETH supply.
At the same time, the top eight ETH staking service providers control 66% of the market, indicating a significant head effect. It is worth noting that Lido Finance is responsible for approximately 4.88 million worth of staked ETH, accounting for nearly 30% (29.27%) of the market, which is equivalent to the total owned by the second to fifth.
As a result of the SEC’s crackdown, it is predictable that ETH from centralized institutions will continue to flow to Lido Finance, along with the suspension of Kraken’s staking service.
The decentralized ETH staking protocol represented by Lido Finance not only has an absolute advantage over centralized institutions at the moment but it is also expected to accelerate the outflow of ETH in some centralized institutions in the short term due to the regulatory impact of the SEC.
After last year’s explosions of FTX, Celsius, Voyager, BlockFi and many other centralized crypto institutions, it is inevitable that they will be more tightly regulated. DeFi protocol is decentralized and borderless, providing users with anonymity through smart contracts and other automated design.
The crypto community believes that this will have a long-term impact, which is good for ETH and other decentralized service providers, and also has important significance for the decentralized space.
If regulators such as the SEC severely restrict centralized institutions’ staking services in the future, a larger market share will naturally fall to the decentralized world.
About Us
Ruby Protocol is a private data management framework for Web 3.0 that proposes and implements a privacy layer interacting with the multi-chain ecosystem. It is a fine-grained private data access-control gateway across different entities and organizations in the decentralized and traditional financial world.
