The quest to quantify blockchain decentralization has led to various metrics, with the Nakamoto Coefficient being one of the prominent measures. However, in the recent listings of blockchains by their degree of decentralization, Cardano was notably absent from the top ranks, a position that has sparked curiosity and debate within the crypto community.
Cardano is often distinguished from Ethereum Virtual Machine (EVM)-based chains due to its unique network structure and operational mechanics. Unlike Ethereum, which runs on the EVM, allowing for interoperability and similar structures across various networks, Cardano employs a different approach with its Ouroboros consensus algorithm.
Ouroboros is a proof-of-stake (PoS) protocol, but it diverges from the standard PoS mechanisms. It is designed to achieve consensus in a more energy-efficient and scalable way. This dedication to a scientific philosophy in its protocol development sets Cardano apart, which may contribute to why it is often considered separately from other EVM-compatible chains.
The distinctiveness of Cardano’s architecture is complemented by its layered structure. The settlement layer (Cardano SL) and the computation layer (Cardano CL) operate independently, which differentiates its operational functions from those of other blockchains where these layers are typically intertwined.
Cardano’s network also emphasizes a community-driven approach to governance and development. The project’s catalyst funds and the Voltaire phase, which aims to introduce a fully decentralized decision-making process, are testaments to its commitment to a high degree of decentralization, albeit not necessarily captured by the Nakamoto Coefficient.
Furthermore, Cardano’s method of staking and block production involves a randomized process for electing slot leaders, which is different from Ethereum’s process. This adds another layer of complexity when comparing the two networks based on the number of entities that can collectively shut down or control the network, as the Nakamoto Coefficient attempts to measure.
