I think the other way around. Dgraph was thought to be distributed. It cannot be "atomically" distributed based on entities. But in smaller parts of an entity. If each instance of Dgraph takes care of a small part of that entity, it becomes virtually more performatic.

Imagine, in an abstract way, that it is a hashing process. Where the attributes are spread over several instances in the cluster and Dgraph just "decodes" it for you quickly because it already has the key.

Could it be based on entities? yes, but I don't think it would bring any benefit. Imagine that you have 10 instances, and you have 10 entities. You have 3 entities with many edges (values and outgoing edges) and 8 "light" entities, without much information. Well, you will leave 3 entities in high usesage of resources while 8 entities are idle because they do not have much information to deliver to all query and mutation requests in the Cluster.

A system based on attributes in a distributed way is much more performance tho.