While establishing a U.S. Crypto Strategic Reserve might legitimize crypto assets, doesn’t government ownership fundamentally undermine the decentralized ethos that drew us to crypto in the first place? 

Curious to hear how the community sees this potential paradox.

i like tech stuff and sometimes politics also running, last one memes

Arguably, it depends on the asset. Bitcoin's decentralization is a function of miners competing for block rewards, not accrued holdings. even still, microstrategy (the largest individual holder of BTC) is in the low single digit percentage of total bitcoin and it's unlikely another will outcompete them. There is concern of price action, which does have second order effects with miners, but bitcoin has larger threats to miner abandonment moving forward even without this consideration.

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BDFL of Quilibrium, Eng @ Farcaster, ex-Coinbase, always opinionated, never hydrated

/quilibrium

There are also other kinds of protocols which have permissioned structures for being a validator, but i won't dive too deep into that, because those protocols are by consequence not actually decentralized.

There are also some protocols that are layer 2s, which rely on another protocol (thus, a layer 1) for foundational consensus. Some of these layer 2s use the parent protocol's token as the native token, some don't. Ownership of tokens has a more complicated relationship in terms of impacts in this case, because sometimes the L2 is decentralized, sometimes (most of the time), they're not decentralized at all and completely lying about it.

I hope that helps, but happy to answer any more questions if you wanted to deep dive something specific.

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Ethereum and Solana maintain consensus via staked assets, in other words, machines on the network are pledging a quantity of the asset (based on whatever rules the protocol has in place) as part of the process. In return, they receive a reward in new tokens. If they cheat, fail, or otherwise misbehave, there is some kind of penalty, typically referred to as slashing. In terms of decentralization, most proof of stake protocols have around 2/3 majority requirement for consensus, so you'd have to control 66.7% of all staked tokens to cheat and get away with it. That being said... it's probably better to not think too hard about the fact that over 50% of all staked eth is split between Lido and Coinbase.

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