Many solver-based decentralized protocols rely on competition models to incentivize actors like validators, solvers, and liquidity providers. While competition can drive efficiency, it also has a well-documented tendency to lead to centralization. As competitive dynamics favor the most resourceful players, smaller participants get squeezed out, ultimately reducing diversity and increasing reliance on a few dominant actors.

Interestingly, societies avoid competition models for roles deemed crucial to service quality, such as airport security or medical services, to prevent deterioration due to cost-cutting. However, in financial services, competition remains the norm, even when it may negatively impact system integrity.

This session explores alternative incentive models that prioritize resilience and decentralization over a pure race-to-the-bottom approach.