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The Blec List

A cheat sheet to some of DeFi’s gravest points of centralization

Updated 3 Apr 2023


USDC runs Ethereum

Circle, the issuer of centralized stablecoin USDC, effectively controls the future of Ethereum due to its dominance as the top stablecoin in the DeFi ecosystem. DeFi has become so reliant on USDC that it would fall apart without it, and DeFi teams are heavily incentivized to maintain this reliance due to strategic partnerships formed between DeFi teams, VCs, Coinbase, and other interested parties. If an Ethereum hard fork were to occur that Circle did not support, DeFi on that fork would immediately disintegrate. So, Circle has the power to dictate which hard forks occur and when.


L2s are mega-centralized and mega-regulatable

Every Ethereum L2 (including but not limited to Arbitrum, Optimism and zkSync) has a multisig that can unilaterally upgrade the logic of the chain, has 1 sequencer run by the core team that can re-order or censor transactions, and uses a whitelist to control its validator network. This means that every team behind every L2 has the ability to halt the chain, freeze funds and censor transactions. This becomes especially troubling when one realizes a strong argument could be made that these L2 companies are acting as money transmitters under U.S. law.


Chainlink can kill DeFi whenever it wants

Most DeFi protocols and applications are either directly or indirectly reliant on the security of Chainlink‘s 4-of-9 multisig for their stability and security. The multisig has unknown signers in unknown jurisdictions with unknown motives and unknown security. These signers can add or remove any price feed to/from any Chainlink smart contract – even malicious ones.


Using RocketPool requires trust in ETH goons & CEXes

RocketPool has an “oracle DAO” (oDAO) that serves as an admin team with so much power that it’s capable of corrupting or destroying the rETH/RPL ecosystem. The team consists of several Ethereum influencers, regulated exchange Coinbase and CBDC-builder ConsenSys.


MakerDAO is like USDC but worse

MakerDAO has willfully put DAI at severe existential threat now that over 65% of collateral is in the form of regulated and centralized stablecoins (USDC, GUSD, USDP) that can be instantly blacklisted by their issuer at the request of a state actor and an additional significant percentage of collateral is in the form of real-world assets that cannot be liquidated on-chain.