The Financial Innovation and Technology for the 21st Century Act (FIT21) provides specific criteria to define a "decentralized network" in relation to blockchain systems and digital assets. Here are the conditions that must be met for a network to be considered decentralized:

Authority and Control:

Over the previous 12 months, no single person or entity should have had the unilateral authority to: Control or materially alter the blockchain system's functionality or operation.

Restrict or prohibit any person (not being a digital asset issuer, related person, or affiliated person) from: Using, earning, or transmitting the digital asset.

Deploying software that uses or integrates with the blockchain system.

Participating in a decentralized governance system of the blockchain.

Operating a node, validator, or other computational infrastructure related to the blockchain.

Ownership and Voting Power:

During the previous 12 months, no digital asset issuer or affiliated person should have: Beneficially owned 20% or more of the total units of the digital asset that are either created, issued, distributed, or freely transferable.

Had the unilateral authority to direct the voting of 20% or more of the outstanding voting power of the digital asset or related decentralized governance system.

Included voting power with respect to any decentralized governance system of the blockchain system.

Intellectual Property and Source Code:

Over the previous 3 months, the digital asset issuer, any affiliated person, or any related person must not have implemented or contributed intellectual property to the blockchain system's source code that materially alters its functionality, except for: Addressing vulnerabilities, errors, regular maintenance, cybersecurity risks, or other technical improvements.

Changes adopted through the consensus or agreement of a decentralized governance system.

Public Marketing: During the previous 3 months, the digital asset issuer and any affiliated person should not have marketed the digital assets to the public as an investment.

End User Distributions: Over the previous 12 months, all issuances of the digital asset must have been made through programmatic functioning of the blockchain system as end user distributions.