How Does the Concept of Decentralization Affect the Application of the Howey Test?

The degree of decentralization directly impacts the "efforts of others" prong of the Howey Test. If a network is truly decentralized, meaning no central party has control over its development or success, the expectation of profit is not derived solely from the efforts of others.

This is the main argument for why tokens like Bitcoin are not considered securities. High centralization, conversely, strongly suggests a security classification.