What Are the Potential Centralization Risks Associated with Using Developer-Set Checkpoints?
Developer-set checkpoints introduce a centralization risk because they grant the core developers the authority to dictate which chain history is considered valid. If a malicious developer sets a checkpoint to an illegitimate block, the network is forced to accept it, overriding the decentralized consensus.
This reliance on a trusted third party (the developers) undermines the core tenet of a decentralized, trustless system, creating a single point of failure and potential for censorship or manipulation.
Glossar
Single Point of Failure
Concentration ⎊ In crypto derivatives, this risk materializes when excessive collateral or governance control resides with a small number of entities, such as a few large liquidity providers or key developers.
Checkpoints
Checkpoint ⎊ In the Ethereum Proof-of-Stake architecture, checkpoints are specific blocks that mark a point of finality on the Beacon Chain.
Centralization Risk
Concentration ⎊ Centralization risk within cryptocurrency, options, and derivatives manifests as systemic vulnerability stemming from the disproportionate control exerted by a limited number of entities ⎊ exchanges, clearinghouses, or large market participants.
Malicious Developer
Exploit ⎊ The term "Malicious Developer" within cryptocurrency, options trading, and financial derivatives contexts denotes an individual or group leveraging technical expertise to subvert system integrity for illicit gain.
Centralization Risks
Control ⎊ Concentration of power within a few validators or large token holders introduces governance risk that can lead to protocol capture or adverse parameter changes.