# The Decentralization Slingshot

**Published by:** [Abrahamcr](https://paragraph.com/@abrahamcr/)
**Published on:** 2023-05-17
**URL:** https://paragraph.com/@abrahamcr/the-decentralization-slingshot

## Content

By AbrahamCR Summary Centralization is not always bad, and decentralization is not always great for some objectives. As with most things in life, decentralization is a spectrum, and understanding the benefits and harms of different decentralization variables is essential. In the crypto industry, the word “decentralization” is often misunderstood and even, some othertimes, overused. This essay discusses the concept of decentralization and how it applies to web3. I explain that decentralization is not a new idea and has been present in software development and society for a long time. I think that to have economic freedom and alignment with web3 values, a project's infrastructure and economics should go through a decentralization process. I introduce the Decentralization Slingshot mental model, which states: For a project to reach a successful level of decentralization, it must undergo a series of centralized steps to strengthen it enough to stand by itself in a decentralized way. Projects live on centralized planets with a gravity field; they need to build a slingshot to propel their spaceship and be able to leave the centralized planet. If they don’t build the slingshot in the thorough way required, they will crash again into the centralization planet once they launch their spaceship into the decentralized open space. Overall, the essay provides an insightful perspective on decentralization and its role in web3. I’m not saying this is the right approach or the answer to decentralization; The Decentralization Slingshot is a mental model and tool for understanding decentralization. I hope you enjoy this essay 🚀 💙 (neither the rocketship emoji nor anything in this article is investment advice). The Decentralization Slingshot Decentralization is one of the most widespread topics on web3; decentralization is a principle, a political structure, a way of making decisions, a type of information and database structure, and many others. It is a concept that has several implementations in the real world, and it’s the foundation over which web3 is being built. Decentralization isn’t new in technology; it’s been present in software development for decades. One of my favorite essays about the topic is The Cathedral and the Bazaar, written by the legendary developer Eric S. Raymond. Check it out☝️; everything it covers will ring a bell with Bitcoin, Ethereum, and other blockchains' approach to software development. The very first paragraph reads: “Linux is subversive. Who would have thought even five years ago (1991) that a world-class operating system could coalesce as if by magic out of part-time hacking by several thousand developers scattered all over the planet, connected only by the tenuous strands of the Internet?” By substituting the words “Linux” with “Ethereum” and “operating system” with “decentralized coordination system,” we would find ourselves today in a similar scenario to that of Raymond in 1997. Take a look: “Ethereum is subversive. Who would have thought even five years ago (2018) that a world-class decentralized coordination system could coalesce as if by magic out of part-time hacking by several thousand developers scattered all over the planet, connected only by the tenuous strands of the Internet?” To sum up, the essay describes how there are two ways of approaching software development, the cathedral and the bazaar. Raymond writes: “I also believed there was a certain critical complexity above which a more centralized, a priori approach was required. I believed that the most important software (operating systems and really large tools like the Emacs programming editor) needed to be built like cathedrals, carefully crafted by individual wizards or small bands of mages working in splendid isolation, with no beta to be released before its time […] [...] the Linux community seemed to resemble a great babbling bazaar of differing agendas and approaches (aptly symbolized by the Linux archive sites, who'd take submissions from anyone) out of which a coherent and stable system could seemingly emerge only by a succession of miracles The fact that this bazaar style seemed to work, and work well, came as a distinct shock. As I learned my way around, I worked hard not just at individual projects, but also at trying to understand why the Linux world not only didn't fly apart in confusion but seemed to go from strength to strength at a speed barely imaginable to cathedral-builders.”. The Cathedral and the Bazaar: Musings on Linux and Open Source by an Accidental Revolutionary Cathedral = centralized development carefully crafted by individual wizards or small bands Centralized, closed doors, and egoistic Templo Expiatorio de la Sagrada Familia started in 1882 and is not finished yet Bazaar = decentralized development as a babbling bazaar of differing agendas and approaches with a coherent and stable system could seemingly emerge. Decentralized, open-source, and community-driven Founded in 1461, Istanbul's Grand Bazaar spans over 30,000 sqm and is evolving all the time. It's never finished. Time and time again, it has been proven that open source systems are objects where people can iterate continuously over what was built by others and thus create something new. This is the technical implementation of the romantic analogy that expresses how everything is built on top of giants’ shoulders. Although, here comes the controversial opinion of this article: in our industry, the word “decentralization” and the bazaar approach is often misunderstood and even, other times, overused. How does this apply to crypto projects? In the crypto industry, people frequently mistake “centralization” with evil; I believe that making that correlation with a very dynamic concept is a judgment error. Some non-negotiable elements must be decentralized to align a project with the web3 philosophy and its foundational values. Some of these non-negotiables are: Execution layers, information storage, and a blockchain consensus must be as decentralized as possible. That’s why a Bitcoin block is 1 MB, that’s why 32 ETH are needed to set up a validator node on Ethereum, and that’s why you can run a Bitcoin node on a device worth $250 dollars. Many blockchains have one of these layers centralized, where only some specific players can invest millions of dollars and be validators in the networks. Software development must be open source so anyone can see, use, and iterate over the code used to run a blockchain and the different decentralized apps (dapps) built on top of it. People must be able to store their assets (private keys) independently, eliminating the need for third parties. This is fundamental for economic freedom. I firmly believe decentralization is the ideal final state of many software systems, organizations, and decision-making processes. I am also aware that everything has a tradeoff, and decentralization isn’t always the best way of executing some things. We are optimizing for a world where web3 maintains a high level of transparency, it's very efficient, has widespread adoption, and has a huge alignment with the principles we preach. To achieve scale, decentralization is often a limiting factor for growth, and that’s where “the Decentralization Slingshot” mental model has its birth. Naturally, everything in the crypto industry begins as a centralized model. As it slowly scales, it implements several features and layers that apply some degree of decentralization to the project. Bitcoin started with a “centralized” whitepaper made public by Satoshi, and decentralization happened gradually. In its early stages, the amount of Bitcoin miners was so small that they could all communicate through email and agree on the next steps for the network. Ethereum began with Vitalik and a few believers that implemented the first version of that blockchain, with many of them living in the same house in Zug, Switzerland. Bitcoin and Ethereum were highly centralized back then compared to today's standards. The Decentralization Slingshot is a mental model that states: for a project to reach a successful level of decentralization, it must undergo a series of centralized steps to strengthen it enough for it to stand by itself in a decentralized way. Let’s start a visualization exercise to understand this model. Actual picture of Pepe visualizing this mental model. Most projects begin with a single person or small team with a vision to build something. Imagine these people living on the Centralization Planet, which is ideal for starting things because it has a controlled environment and the ideal conditions to make progress quickly. Having few people on the planet facilitates quick decision-making, there aren’t many distractions, resources are within reach, and people don't need to browse an almost infinite information library (Discord 👀 👀). This small team now has two challenges, similar in size and difficulty: building a spaceship that people will want to board (an approachable, easy-to-use, and effective product) and building some device that helps them escape the Centralization Planet to be able to reach the decentralized outer space. Let's remember that every planet has a gravitational field that pulls its inhabitants towards its center, so building a device that injects enough energy to escape this gravitational field is essential. The device will be a gigantic slingshot. Illustration by @Cripto_street While the team is on the planet, it can move fast and frictionlessly, so they choose to stay as long as necessary. Some teams fall into comfort and would rather stay on the planet and explore further the decentralization idea. Teams simultaneously build their spaceship (their product) to their decentralization slingshot (decision-making processes, tokenomics, governance, conflict solution systems, etcetera). Once the slingshot has integrated all the devices needed to inject enough energy into the spaceship, and when the spaceship has enough features to fly in the decentralization space, the team chooses to board the spaceship and start its journey. Suppose the slingshot is not built correctly and doesn’t inject enough energy for the spaceship to abandon the planet’s gravitational force. In that case, the laws of physics tell that the spaceship won’t leave the planet and would probably need to make a forced landing (crash) on Centralization Planet again. Instead, if they make it out of the gravitational force, there’s the exciting vastness of space, where all possibilities are exponential. A real case Let’s look at the implementation of this mental model in the real world; the case of Arbitrum. Here’s a summary of how Arbitrum has built its decentralization slingshot. Arbitrum is a layer 2 scaling solution for Ethereum developed by Offchain Labs. Offchain Labs was founded in 2018 by Ed Felten, Steven Goldfeder, and Harry Kalodner. The three founders of Offchain Labs are scientists with a long history in computer science and cryptography. They met at Princeton University. A centralized group of 3 people started building this spaceship, and that’s awesome. Offchain Labs has raised $123.7 million USD to build this technology. These rounds were $3.7 M on April 2019, $20 M on April 2021, and $100 M on August 2021. They needed this money to literally build their spaceship (product) and slingshot (decentralization scaffolding) Arbitrum has been building its technology for over 4 years, and some fundamental parts of its infrastructure were centralized by Offchain Labs (which was OK!). People speculated for a long time when Arbitrum was launching their token. People were excited about a hot airdrop, but that’s the least important part. A token for Arbitrum is a fundamental part of their decentralization scaffolding (slingshot) as it’s a clear step to start the decentralization process. Arbitrum announced the launch of their token on March 16th, and it was one of the most expected events of recent years in the industry. I think that the most critical part of the airdrop was not receiving tokens; it was the decentralization process Arbitrum announced with it. Let’s take a look at the steps they announced; you can read the full detail here: Arbitrum's "State of Decentralization" Arbitrum is a fascinating example of the Decentralization Slingshot; they needed to take an intended series of centralized steps that enabled them to start their decentralization journey. Each step enables decentralization, from raising money to launching a governance token. Indeed, the process could have been better, and it will never be perfect. During the launch of the Arbitrum DAO, much controversy happened because of how they communicated the first proposal. Still, they are literally explaining publicly how they will build the next phase of their Decentralization Slingshot; they will start decentralizing chain ownership ✅, then they will continue with validator ownership, after that, the sequencer ownership, and at the end the data availability committee ownership. Decentralization is not a binary thing; it’s a spectrum. Offchain Lab's CEO crying as Arbitrum takes off from the Centralization planet Bitcoin is another example of a network that achieved a decentralization journey, starting with a small number of contributors and becoming one of the most decentralized networks. It started with Satoshi publishing the whitepaper in a cypherpunk mailing list metzdowd.com, then Hal Finney ran Bitcoin, and the rest is history. https://twitter.com/halfin/status/1110302988?lang=es At some point, Ethereum was a "centralized" team of fewer than 15 people working in a house in Miami announcing the project at the North American Bitcoin Conference in 2014. Now, it's the decentralized backbone of the Internet's next frontier. Conclusion We can take the Decentralization Slingshot mental model to the real world. Centralization isn't bad if approached correctly; it's just a path for building. Centralization could become beneficial in some circumstances and is ideal for starting things quickly and efficiently to decentralize them along the way. Also, decentralization isn't always good. Let's think about the number of DAOs that today are on the brink of failure or have imploded in the last few months. I believe this happened because they didn't build their slingshot and spaceship properly to get out of Centralization Planet. Ultimately, decentralization isn't binary; it's a spectrum. Let's always try to question, understand and contemplate how different centralization variables could be harmful or beneficial. Doing so can forge a stronger judgment and help us understand where we come from and where we're going. The end If you liked this essay, support the author and @Cripto_street by buying this mental model as an NFT. Click the collect button below 👇🏾👇🏾👇🏾 By AbrahamCR

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