Examining Transactional Decentralization on the Ethereum Blockchain

Abstract

The decentralized nature of blockchain ecosystems involves a complex interplay of various sources, entities, and decision-makers that act collectively, yet independently, avoiding unnecessary concentration or dominance. Decentralization can be assessed through various dimensions, such as consensus, network, governance, transaction, and wealth. This work presents an overview of the current landscape of transactional decentralization. Assessing decentralization requires robust metrics capable of distinguishing and incorporating factors such as the distribution of participants between addresses, blocks, and transactions. Therefore, in this work, we actively utilize and examine well-known statistical metrics, including the decentralization index, Gini coefficient, Nakamoto coefficient, Herfindahl-Hirschman index, and Shannon entropy, using Ethereum blockchain data over a period of seven years. Our analysis delves into the intricate dynamics of decentralized transactions, uncovering the evolving trends and challenges that define decentralization. This research contributes to the ongoing discourse surrounding blockchain decentralization, providing information on the measurement and evaluation of the status of decentralization using raw and grouped data from the Ethereum blockchain.