Hashgraph funds corporate DLT projects. How decentralized is Hedera? – Ledger Insights
The Hashgraph Association has launched an enterprise program that sets aside up to $22.5 million to accelerate projects using the public Hedera DLT network for enterprise projects. Hedera has a governing council populated by 28 major organizations, including Boeing, Google, IBM and Nomura. In other news, a recent hack raised questions about Hedera’s decentralization.
The association was funded by grants from Hederas HBAR tokens and it operates as a non-profit organization. In 2021, the Hedera Governing Council set aside 10.7 billion HBAR worth more than $700 million today, with the bulk going to the separate Hashgraph Foundation.
The Hashgraph Enterprise program aims to support 40 projects a year that will receive up to USD 500,000 equivalent in HBAR tokens. Projects that have co-financing in the queue will be preferred.
It has already prequalified several projects, including some involving board members.
“In 2022, we welcomed over 36 projects worldwide and brought on board more than 18 ecosystem partners, including some of the world’s leading system integrators (IBM, HCL, Orange) and academic institutions (Fraunhofer, University of Zurich, ESSEC),” said Kamal Youssefi , Chairman of The Hashgraph Association. “This initial success demonstrates our commitment to enabling the building of a vibrant ecosystem for Hedera-powered projects and improving the professional environment for the Hedera community.”
Youssefi was previously on the Hedera Governing Council representing Swisscom Blockchain, the only company we know of that resigned from the Hedera Council.
At the same time, it was announced that Rob Allen will become CEO of the Hashgraph Association, joining the Hashgraph Foundation. He was also previously on the board and represented the Australian payment organization eftpos.
Hedera Hack raises centralization issues
Meanwhile, last month Hedera suffered its first publicly known hack with a loss of around $600,000. The hack was limited because the network was quickly disconnected. Although the board members are known to control all the nodes writing to the network, the network shutdown was carried out by Hedera and Swirlds Labs staff alone. In other words, of two closely related firms, not 28 enterprises.
It was possible because they have secure access to a proxy system that provides security protection to the network, effectively making the council’s nodes hard to find. The two firms have access to all powers, although 14 councilors have distributed powers to their own nodes.
While it’s great that the hack could be resolved so quickly, it does put a big question mark on the degree of decentralization of the network.
The hacker exploited a flaw in Hedera’s main web code. This allowed them to get transaction approval using the DEX liquidity pool credentials instead of their own. The error was fixed and the network was back in action 41 hours after it went offline.
