Why Your Decentralized App Is Still Centralized

Your dApp's gateway to the blockchain is a single point of failure. Centralized RPC providers like Infura and Alchemy see >50% of Ethereum traffic, creating systemic censorship and downtime risk.

• Single Point of Failure: One provider outage can brick your entire frontend.
• Data Centralization: Providers can track, front-run, and censor user transactions.
• Vendor Lock-in: Creates dependency on a centralized entity's pricing and policies.

Rollups trade base-layer decentralization for scalability, but their sequencers are often a single, centralized operator. This creates a temporary but critical centralization vector.

• Transaction Ordering: Central sequencers (e.g., Arbitrum, Optimism) can extract MEV and reorder transactions.
• Liveness Risk: A single sequencer failure halts the entire L2 chain.
• Withdrawal Delays: Users must trust the sequencer to post data back to L1, requiring a 7-day challenge period for security.

DeFi's trillion-dollar TVL rests on a handful of data feeds. Chainlink dominates with >50% market share, creating a critical dependency for price discovery and liquidation events.

• Single Source of Truth: A bug or attack on the primary oracle can cascade through the entire DeFi ecosystem.
• Data Latency: In volatile markets, even slight delays can be exploited for millions in arbitrage.
• Governance Risk: Oracle networks, while decentralized, still have upgrade keys and governance tokens controlled by core teams and whales.

Your dApp's gateway to the blockchain is probably a single, centralized RPC provider like Infura or Alchemy. This creates a critical censorship vector and data bottleneck.

• Solution: Decentralized RPC networks like POKT Network and Lava Network.
• Key Benefit: Fault tolerance via multi-provider routing and slashing for downtime.
• Key Benefit: Unbundled access, preventing a single entity from seeing all user traffic.

A centralized frontend hosted on AWS or Cloudflare is a kill switch. A government or provider can take it down, bricking user access.

• Solution: Decentralized frontend protocols like IPFS, Arweave, and Fleek.
• Key Benefit: Censorship-resistant hosting via content-addressed storage.
• Key Benefit: Global persistence—once uploaded to Arweave, it's permanent.

DeFi protocols relying on a single oracle (e.g., a sole Chainlink data feed) reintroduce centralization. The oracle is the truth.

• Solution: Decentralized Oracle Networks (DONs) and Pyth Network's pull-based model.
• Key Benefit: Data signed by 80+ first-party publishers, not a single oracle node.
• Key Benefit: Economic security via staking and slashing on inaccurate data.

Users lose value to centralized searchers and builders who monopolize block space. This distorts transaction fairness and finality.

• Solution: SUAVE (Single Unifying Auction for Value Expression) by Flashbots and MEV-Share.
• Key Benefit: Decentralizes block building by creating a competitive marketplace.
• Key Benefit: Returns MEV value back to users and applications via order flow auctions.

Rollups like Arbitrum and Optimism use a single, permissioned sequencer. This creates liveness risks and enables transaction censorship.

• Solution: Shared sequencer networks like Espresso Systems and Astria.
• Key Benefit: Decentralized sequencing across multiple rollups for atomic cross-rollup composability.
• Key Benefit: Censorship resistance via a validator set, not a single operator.

DApp data queries are served by centralized indexers like The Graph's hosted service, creating a data availability and reliability bottleneck.

• Solution: The Graph's decentralized network and competitor Subsquid.
• Key Benefit: Fault-tolerant queries with ~1000+ Indexers serving data.
• Key Benefit: Censorship-resistant APIs where data is served by a staked, slashed network.

Your smart contract is on-chain, but every user query and transaction is routed through a centralized gateway. A single provider outage (e.g., Infura, Alchemy) can brick your entire frontend. This creates systemic risk for DeFi protocols and NFT marketplaces.

• >60% of Ethereum traffic flows through two providers.
• Censorship vector: Providers can blacklist addresses or contracts.
• Data integrity risk: Malicious RPCs can return false chain data.

Rollups like Arbitrum and Optimism rely on a single, permissioned sequencer to order transactions. This creates a temporary but critical centralization point where the sequencer can censor, front-run, or reorder transactions for MEV. While fraud proofs offer eventual security, liveness depends on a single entity.

• ~7-day challenge window for fraud proofs on Optimistic Rollups.
• Single sequencer controls transaction ordering and latency.
• Centralized upgrade keys often held by founding teams.

DeFi's trillion-dollar TVL is secured by a handful of data providers. Chainlink dominates, creating a systemic reliance where a bug or governance attack could destabilize major protocols like Aave and Compound. Alternative oracles (e.g., Pyth, API3) face similar centralization in their node operator sets.

• Chainlink secures >$50B in DeFi TVL.
• Permissioned node operators with high staking barriers.
• Data source centralization: Many feeds pull from the same few APIs.

Your decentralized application is hosted on a centralized domain (AWS, Cloudflare) and served via a centralized DNS. This allows for legal or technical takedowns, as seen with Tornado Cash and dYdX's frontend. IPFS helps but doesn't solve discovery. True decentralization requires resilient hosting and censorship-resistant gateways.

• >90% of dApp frontends hosted on centralized cloud providers.
• Single-point DNS failure enables easy censorship.
• ENS + IPFS is a partial solution with poor UX and latency.

Cross-chain assets are often just IOU tokens backed by a centralized multisig or a small validator set. Bridges like Multichain (hacked) and Wormhole (exploited) show the catastrophic failure mode. Even "decentralized" bridges (e.g., Across, LayerZero) rely on external assumptions and relayers that can be points of control.

• >$2B stolen from cross-chain bridges since 2020.
• ~8/15 multisigs common for "canonical" bridge security.
• Relayer centralization creates liveness and censorship risks.

Protocol governance tokens are often concentrated among early investors and teams, making "decentralized" upgrades a formality. Voter apathy leads to <5% participation, enabling whale manipulation. Snapshot votes are off-chain and non-binding, while on-chain execution relies on a privileged multisig (e.g., Uniswap, Compound).

• <5% tokenholder participation in most governance votes.
• Top 10 addresses often control >30% of voting power.
• Timelock + multisig is the de facto execution mechanism.

Hosting your UI on centralized services like AWS or Cloudflare makes it trivial for regulators to take it down, severing user access. The protocol lives on-chain, but users can't reach it.

• Key Risk: A single takedown notice can kill your entire application's accessibility.
• Key Solution: Explore decentralized frontend hosting via IPFS, Arweave, or networks like Fleek and Spheron.

Defaulting to Infura or Alchemy for node access means your app inherits their compliance policies and infrastructure risk. They can censor transactions or fail, breaking your app.

• Key Risk: RPC providers can filter or block transactions based on OFAC lists.
• Key Solution: Implement fallback RPCs, use decentralized RPC networks like POKT, or incentivize users to run their own light clients.

Dependence on a single oracle like Chainlink, while robust, reintroduces a trusted third party. Your DeFi protocol's solvency hinges on their data feed's correctness and liveness.

• Key Risk: A corrupted or delayed price feed can be exploited for $100M+ in minutes.
• Key Solution: Use multiple oracle providers (e.g., Pyth, API3), implement TWAPs, or design for oracle-minimized architectures.

On L2s like Arbitrum or Optimism, the sole sequencer orders all transactions. This creates a central point for MEV extraction and potential downtime, reverting to L1 security only in failure modes.

• Key Risk: Sequencer can front-run, censor, or go offline, halting the chain.
• Key Solution: Advocate for and design with decentralized sequencer sets, shared sequencers like Espresso, or based sequencing that uses Ethereum for ordering.

Low voter turnout and whale concentration mean a handful of entities control protocol upgrades and treasury funds. This makes your "DAO" a de facto multisig controlled by VCs or foundations.

• Key Risk: <5% token holder participation enables capture by insiders or attackers.
• Key Solution: Implement rage-quit mechanisms, futarchy, or minimal governance that delegates only parameter tuning, not full upgrade power.

Most cross-chain bridges rely on a multisig or a small validator set to custody funds. This creates a $2B+ honeypot for hackers and a critical trust assumption (e.g., Multichain, Wormhole).

• Key Risk: A bridge hack destroys the canonical representation of your asset on other chains.
• Key Solution: Prefer native asset transfers (LayerZero, CCIP), light client bridges (IBC), or liquidity network models (Connext, Across).