As 2025 comes to a close, Ethereum co-founder Vitalik Buterin published an in-depth article on the governance structures within the crypto ecosystem, titled (The Balance of Power in Crypto Governance). In it, he highlights several potential risks in current crypto governance and calls for a reevaluation of the power balance among developers, communities, L1 protocol designers, and token holders.
Developer vs. Community: Who Decides?
What Vitalik first focuses on is the dominant role developers play in crypto projects. He points out that many communities, despite appearing decentralized on the surface, are actually still led by a small group of core developers in decision-making. He notes that while this model has its efficiency, it also easily leads to abuse of power, lack of transparency, and even a departure from the original ethos. "We often say we want the community to be in charge, but in reality, it's the development team that sets the direction," Buterin wrote.
L1 and L2: Technological innovation or power concentration?
Another noteworthy observation is the difference in governance between L1 (Layer 1 blockchains) and L2 (Layer 2 scaling solutions). Vitalik points out that while the rapid development of L2 brings flexibility and efficiency to the ecosystem, it also quietly allows new power centers to form. Infrastructure projects like rollups and bridging protocols are often controlled by a single team that manages the upgrade roadmap and governance mechanisms, which deviates from the early ideals of blockchain decentralization.
He warns that if checks and balances are not established in the design, L2 may become a new 'governance black box.'
Insufficient governance participation: The risks dominated by a minority emerge.
Vitalik also questions the current governance mechanisms in the crypto community. He notes that although many systems open governance proposals and voting, the actual participation often comes from only a few 'active governance participants', while the majority of users and community members choose to observe.
Such situations lead to governance being dominated by a minority, lacking broad consensus and community participation, which may cause decision-making to deviate from the public interest.
He suggests designing governance processes that are more inclusive and accessible, and rethinking how to enhance general users' participation incentives and visibility.
What to do? Vitalik proposes three 'rebalancing' directions.
To address the above issues, Vitalik proposes three possible directions for governance adjustments:
Give the community more direct 'veto power': Establish mechanisms that allow users to effectively prevent developers or foundations from 'running amok', similar to a grassroots community check-and-balance device.
Make technical decisions more transparent and open: Encourage a more open discussion culture on platforms like Github, forums, or social media, rather than making decisions in private or closed meetings.
Promote diverse governance structures: We should not rely solely on a single governance module, such as DAO voting. He believes we can try hybrid models that combine token weight, community delegation, random selection (sortition), and other mechanisms to enhance governance quality and fairness.
From 'Code is Law' to 'Community is Law'?
This article is not just a technical discussion but resembles a philosophical exploration of governance. Vitalik believes that although blockchain started with the principle of 'Code is Law', as applications become increasingly complex, relying solely on code and cryptography can no longer meet all social expectations. He emphasizes that ultimately, there must be a return to human and community participation and checks. He states:
'The blockchain is ultimately a social system, and its rules are maintained through community cooperation.'
'The concept of 'Code is Law' is useful, but it is not absolute. Community consensus is the ultimate bottom line.'
Vitalik Buterin's article once again reminds the crypto community: 'Power' itself is not scary; what is scary is the lack of checks and transparency. Today, as blockchain continues to expand and protocols become increasingly diverse, governance issues are no longer just topics for geeks but are key to the sustainable development of the entire ecosystem.
This article is republished with permission from: (Chain News)
Original title: (Vitalik Buterin Talks About Imbalance in Crypto Governance: Is It Time to Reset the Balance Point? Code is Law is Not Absolute)
Original author: Elponcho
'V God Talks About Imbalance in Crypto Governance: Is It Time to Reset the Balance Point? Code is Law is Not Absolute' was first published in 'Crypto City'