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In addition, certain features of DeFi blockchains favour the concentration of
decision power in the hands of large coin-holders. Transaction validators need to
receive compensation that is sufficient to incentivise them to participate without
committing fraud. Blockchains based on proof-of-stake, which are expected to
improve scalability, allow validators to stake more of their coins so that they have a
higher chance of “winning” the next block and receiving compensation. Since the
associated operational costs are mostly fixed, this setup naturally leads to
concentration (Auer et al (2021)).12 Many blockchains also allocate a substantial part
of their initial coins to insiders, exacerbating concentration issuesFrom :
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