Vitalik Buterin Discusses Imbalance of Power in Crypto Governance: Is It Time to Reset the Balance? Code Is Law Is Not Absolute

As 2025 draws to a close, Ethereum co-founder Vitalik Buterin published an in-depth article exploring the governance structure of the cryptocurrency ecosystem, titled “The Balance of Power in Crypto Governance.” In the article, he highlights several potential risks in current crypto governance and suggests that the balance of power among developers, communities, L1 protocol designers, and token holders should be re-evaluated.

Developers vs. Community: Who Decides?

Vitalik first focuses on the dominant role developers play in crypto projects. He points out that many communities appear decentralized on the surface but are actually led by a small core group of developers making decisions. He mentions that while this model has efficiency benefits, it can also lead to abuse of power, lack of transparency, and even run counter to the original spirit. “We often say that the community should have the final say, but in reality, it’s usually the development team setting the direction,” Buterin writes.

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 notes that while the rapid development of L2 brings flexibility and efficiency to the ecosystem, it also quietly creates new centers of power. Infrastructure projects like rollups and bridging protocols are often controlled by a single team that manages upgrade roadmaps and governance mechanisms, which contrasts with the early ideals of blockchain decentralization.

He warns that without built-in checks and balances in their design, L2 solutions could become new “black boxes” of governance.

Insufficient Governance Participation: Risks of a Few Dominating

Vitalik also questions the current governance mechanisms within crypto communities. He points out that although many systems have open proposals and voting, actual participation is often limited to a small number of “active governance players,” while most users and community members choose to observe rather than engage.

This situation leads to governance being dominated by a few, lacking broad consensus and community involvement, which could cause decision-making to drift away from the public interest.

He suggests designing more inclusive and accessible governance processes and rethinking how to incentivize and increase visibility for ordinary users’ participation.

What’s the Solution? Vitalik Proposes Three “Rebalancing” Directions

To address these issues, Vitalik proposes three potential governance adjustments:

1. Empower the community with more direct “veto rights”
   Establish mechanisms that allow users to effectively prevent developers or foundations from “going rogue,” similar to a bottom-up community check-and-balance system.

2. Make technical decision-making more transparent and open
   Encourage the development of a more open discussion culture on platforms like Github, forums, or social media, rather than decisions being made behind closed doors or in private meetings.

3. Promote diverse governance structures
   Avoid relying solely on a single governance model, such as DAO voting. He suggests experimenting with hybrid models that combine token-weighted voting, community delegation, and sortition (random selection) mechanisms to improve governance quality and fairness.

From “Code is Law” to “Community is Law”?

This article is not just a technical discussion but also a philosophical reflection on governance. Vitalik believes that while blockchain was founded on the principle of “Code is Law,” as applications become more complex, relying solely on code and cryptography can no longer meet all societal expectations. He emphasizes that ultimately, participation and checks by people and communities are necessary. He states:

“Blockchain is ultimately a social system; its rules are maintained through community collaboration.”

“The concept of ‘Code is Law’ is useful, but it is not absolute. Community consensus is the final bottom line.”

Vitalik Buterin’s article once again reminds the crypto community: “Power” itself is not scary; what is dangerous is the lack of checks and transparency. As blockchain continues to expand and protocols diversify, governance issues are no longer just topics for geeks but are critical to the sustainable development of the entire ecosystem.

This article by Vitalik Buterin discusses the imbalance of governance power in crypto: It’s time to reset the balance point? “Code is Law” is not absolute. Originally published on Chain News ABMedia.