Methodology Overview
This page documents the exact framework used by the Web3 Decentralization Intelligence Terminal and this site’s network audits. The goal is a reproducible, quantitative answer to the question: how decentralized is a layer-1 network?
Core Metric: The Nakamoto Coefficient
The backbone of the analysis is the Nakamoto Coefficient — the minimum number of independent parties that would need to be compromised or coordinated together to halt or manipulate a network. A higher coefficient means a government, cartel, or infrastructure provider would need to control more independent parties to break the network, making it more decentralized in that dimension.
Four Pillars, Weighted Composite
Composite decentralization is not a single number. It is built from four scored pillars, each a 0–100 grade derived from the Nakamoto Coefficient and supporting public data:
| Pillar | Weight | What It Measures |
|---|---|---|
| Infrastructure | 30% | How spread out nodes, hosting, and validating infrastructure are |
| Capital | 25% | Distribution of value / stake and economic power |
| Governance | 25% | How distributed decision-making and protocol governance are |
| Software | 20% | Client diversity — how many independent software implementations run |
Composite = 0.30 · Infrastructure + 0.25 · Capital + 0.25 · Governance + 0.20 · Software.
Stress Vectors: Infrastructure Outage Simulation
Beyond static scores, the Terminal stress-tests each network against AWS, GCP, and ISP-level outages. These vectors apply percentage damage to the pillars based on how exposed the network’s infrastructure is to a single provider. This surfaces the practical risk: a network can look decentralized while still depending heavily on one cloud or ISP backbone.
Networks Audited
- Bitcoin (BTC)
- Ethereum (ETH)
- Solana (SOL)
- Cardano (ADA)
- Avalanche (AVAX)
- Polkadot (DOT)
- Cosmos Hub (ATOM)
- XRP Ledger (XRP)
Run any of these live and export an audit-grade PDF report in the Terminal.
Data & Reproducibility
- Public, cited sources: each pillar score is derived from publicly available data referenced in the Terminal’s per-chain views.
- Versioned: data carries a version label (e.g. an annual-quarter label) so analyses can be tracked over time.
- Transparent assumptions: methodology and assumptions are stated explicitly so the grades can be challenged and improved.
Disclaimer: These scores are independent research and educational estimates, not investment advice. They are meant to sharpen comparison, not to prescribe action.