Mar. 19, 2025
The SEC should not approve the HBAR ETF because Hedera is NOT truly decentralized. Here are the reasons why: (1) Too few nodes on Hedera: Currently, there are only 30 nodes (with a maximum up to 39) on the Hedera network. In comparison, most other top blockchain protocols have thousands of validator nodes. This makes Hedera one of the most centralized networks among the top protocol chains. (2) Hedera is a permissioned network: On the Hedera network, anyone who wants to run a node cannot be assigned a validator node. The only way to be eligible to run a validator node is to be elected as a governing council member. The Hedera’s governing council elects new members that can then run a node, and these members typically are large multi-national companies. Also most of the governing council members are non-USA companies with 19 out of the 30 being based outside of the USA. (3) Hashgraph operates most of the nodes: Although each governing council member is supposed to manage and operate its own node, most governing council members do NOT operate its assigned node. In fact, Hashgraph, which is controlled by the founders of Hedera, operates the nodes for most of the governing council members, therefore Hashgraph is in control of most of Hedera’s nodes weakening the argument of decentralization.