As 2025 draws to a close, Ethereum co-founder Vitalik Buterin published an article that delves into the governance structure of the cryptocurrency ecosystem, titled "The Balance of Power in Crypto Governance." In the article, he points out several potential risks in current crypto governance and suggests that the power balance among developers, the community, L1 protocol designers, and token holders should be re-examined.
Developers vs. Community: Who Decides?
Vitalik's primary concern is the dominant role developers play in crypto projects. He points out that many communities, while superficially appearing decentralized, are actually dominated by a small group of core developers who drive decision-making. He notes that while this model has its efficiency, it can also lead to abuse of power, a lack of transparency, and even contradict the original spirit. "We often say we should let the community take the lead, but in reality, it's often the development team that sets the direction," Buterin writes.
L1 vs. L2: Technological Innovation or Centralization of Power?
Another noteworthy observation is the difference in governance between L1 (Layer 1 blockchain) and L2 (Layer 2 scaling solutions). Vitalik points out that while the rapid development of L2 has brought resilience and efficiency to the ecosystem, it has also allowed new power centers to quietly emerge. Infrastructure projects such as rollups and bridging protocols are often controlled by a single team, with upgrade roadmaps and governance mechanisms in place. This falls short of the early ideals of decentralized blockchain.
He warned that if checks and balances are not established in the design, L2 could become a new "governance black box".
Insufficient Governance Participation: The Risk of Domination by a Few Emerges
Vitalik also questioned the current governance mechanisms of the crypto community. He pointed out that although many systems open up governance proposals and voting, only a few "governance activists" actually participate, while most users and community members choose to stand by and watch.
This situation leads to governance being dominated by a minority, lacking broad consensus and community participation, which may cause decision-making to deviate from the interests of the masses.
He suggested that a more inclusive and accessible governance process should be designed, and that the incentives and visibility for ordinary users to participate should be rethought.
What to do? Vitalik proposed three directions for "rebalancing".
To address these issues, Vitalik proposed three possible directions for governance adjustments:
Give the community a more direct "veto power".
Establish a mechanism that allows users to effectively prevent developers or foundations from "going berserk," similar to a basic community check and balance device.Making technology decisions more transparent and open encourages a more open discussion culture on platforms like GitHub, forums, or social media, rather than decisions being made in private or closed meetings.
Promoting diverse governance architectures should not rely solely on a single governance module, such as DAO voting. He believes that hybrid models can be explored, combining different mechanisms such as token weighting, community delegation, and random selection to improve governance quality and fairness.
From "Code is Law" to "Community is Law"?
This article is more than just a technical discussion; it's a philosophical reflection on governance. Vitalik argues that while blockchain originated on the principle of "Code is Law," as applications become increasingly complex, programming and cryptography alone can no longer meet all societal expectations. He emphasizes that ultimately, it must return to the participation and checks and balances of people and the community. He states:
"Blockchain is ultimately a social system, and its rules are maintained through community collaboration."
"The concept of 'Code is Law' is useful, but it's not absolute. Community consensus is the ultimate bottom line."
Vitalik Buterin's article once again reminds the crypto community that "power" itself is not scary; what is scary is the lack of checks and balances and transparency. In today's world of ever-expanding blockchains and increasingly diverse protocols, governance issues are no longer just a topic for geeks to discuss, but are crucial for the sustainable development of the entire ecosystem.
This article, "Vitalik Buterin Discusses the Imbalance of Power in Crypto Governance: Is It Time to Reset the Balance?" by Code is Law, originally appeared on ABMedia, a ABMedia .
