Methodology

The Edinburgh Decentralization Index (EDI) is a methodology framework for defining, analyzing, and evaluating the decentralization level of blockchain systems across multiple layers. These layers are: Hardware, Software, Network, Consensus, Tokenomics, Client API, Governance, and Geography.

This dashboard offers visualizations of the results for the Consensus and Tokenomics layers. The ledgers that are currently supported are: Bitcoin, Bitcoin Cash, Cardano, Ethereum, Litecoin, and Tezos. On the Consensus layer, decentralization is evaluated by applying metrics on the distribution of blocks across the entities that produced them. On the Tokenomics layer, it is the distribution of tokens across token holders that guides the results. The blockchain data that is needed to determine these distributions are collected from BigQuery and self-hosted full nodes. For more information on how data is processed you can refer to the documentation of the open-source GitHub repositories for the Consensus and Tokenomics layers. The dashboard offers various options to the users for customizing the results.

A user can choose which off-chain sources to use to attribute blockchain data to real world entities. This enables the clustering of seemingly independent objects under the same identity.On the Tokenomics layer, clustering enables the attribution of multiple independent addresses to the same wallet.

Here, the clustering options are: "Explorers", "Staking keys", "Multi-input Transactions", "Crystal Intelligence" and "None". A user can choose either "None" or any combination of the other options. "Explorers" refers to attribution and deanonymization data collected from blockchain explorers, namely BitInfoCharts, Etherscan, Wallet Explorer, Dogecoin Whale Alert, TzKT.

"Staking keys" refers to the data collected from stake pools and validators that are used to attribute staking addresses to the same entity.

We have now added the 'Multi-input Transactions' clustering option. This feature allows attributing addresses to the same entity when they are used as inputs in the same transaction, a well-established heuristic for clustering addresses in UTXO-based ledgers.

Explorer data is used for all ledgers except Cardano, whereas staking keys are used only for Cardano.

Additionally, we have introduced a new third-party clustering option called "Crystal Intelligence". This option leverages advanced clustering algorithms from Crystal Intelligence & Crypto Compliance to more accurately group public addresses belonging to the same real-world entity. Unlike the other clustering methods, which are developed in-house, "Crystal Intelligence" is an external integration. You can select "Crystal Intelligence" individually or in combination with our other clustering methods in the Clustering options.

By default, all options (except "None") are applied.

A user can apply the decentralization metrics on all or part of the data by choosing the relevant inclusion threshold on each layer.

For example, if the option "Top 100" is chosen on the Tokenomics layer, then the metrics will apply on the top 100 richest entities in the system, while ignoring the rest. Similarly, if the option "Above $0.01" is chosen in Tokenomics, the metrics will apply on entities that control tokens that were worth, at the given point in time, at least $0.01.

Threshold options are: “Top 100”, “Top 1000”, “Top 50%”, “Above $0.01”, “None”.

By default, no inclusion threshold is applied.