Ethereum founder discusses the essence of decentralized design: potential risks overlooked by crypto asset projects

According to PANews on December 31, Ethereum co-founder Vitalik Buterin revisited the relationship between power structures and security mechanisms in the cryptocurrency industry in an essay titled “Balance of Power.”

The Blind Spots Caused by Business Model Supremacy

Buterin’s observations serve as an important warning to the industry. Many projects pay close attention during the development phase to establishing a “sustainable funding mechanism,” that is, building the economic foundation for team operations. However, they often neglect a equally important design goal—distributing power within the project itself and eliminating potential systemic risks. This suggests a tendency to prioritize efficiency and economic considerations at the expense of security and governance fundamentals.

Spontaneous Decentralization vs. Deliberate Design

Buterin emphasized that the mechanisms for achieving decentralization vary significantly across different domains. In natural language systems like English, or open protocols such as TCP, IP, and HTTP, there is no structural necessity to place a single controlling entity, so power concentration is naturally avoided. In such cases, the decentralized structure is maintained independently of participants’ awareness, driven by the inherent nature of the system.

However, many crypto projects differ from this. When there are potential mechanisms that tend to concentrate power rather than disperse it, project teams need to consciously and strategically redesign governance structures and incentive mechanisms.

Redesigning Power Structures Is an Essential Task

Buterin identified the fundamental challenge facing the crypto industry as developing methodologies to reconcile “efficiency and speed brought by centralization” with “transparency and security achieved through decentralization.” This is not merely a theoretical issue but a practical challenge that the entire industry must continue to face “for a considerable period.”

He urged project teams to reevaluate “decentralization” as an aspect of design with the same priority as profit-generation models. Multi-layered checks and balances within power structures are the key factors that foster long-term project sustainability and social trust.