DeFi Rating System
Self-regulation in the Land of Rugs
DeFi needs a rating system for decentralization.
Many industries benefit from self-regulatory rating systems.
SAE Levels of Driving Automation
The Society of Automotive Engineers (SAE) defines 6 levels of driving automation ranging from 0 (fully manual) to 5 (fully autonomous)
MPAA Rating System
The Motion Picture Association of America (MPAA) film rating system is used to rate a motion picture's suitability for certain audiences based on its content
ESRB Ratings Guides, Categories, Content Descriptors
The Entertainment Software Rating Board (ESRB) is a self-regulatory organization that assigns age and content ratings to consumer video games.
Decentralization Levels
In order to better distinguish levels of decentralization, the cryptocurrency ecosystem should seek to create a similar standard.
Level 0 - Single signer (private key)
Level 1 - Multi-sig
Level 2 - On-chain token governance
Level 3 - NFT governance (election, court, etc.)
Level 4 - Social consensus (opt-in mathematical rulesets)
Trust
At each level, trust reduces:
Level 0 - one key
Level 1 - K of N keys
Level 2 - fungible governance (measure in $)
Level 3 - non-fungible governance (measure in $ + sybils)
Level 4 - math
This would improve understanding and common language around decentralization.