Decentralization of power is an urgent task: Vitalik Buterin highlights design challenges in the blockchain industry

On December 31, according to PANews reports, Ethereum co-founder Vitalik Buterin published a new paper titled “Balance of Power,” delving deeply into the power structures and decentralization within blockchain projects.

The Gap Between Business Models and Decentralization

The most notable point highlighted by Buterin is that many current crypto asset projects are making significant strategic missteps. Project teams tend to focus excessively on “monetization” and “fundraising,” while neglecting the equally important “optimization of power structures.” In other words, in pursuit of the sustainability of development teams, they overlook the issues of excessive concentration of power within the project itself and potential systemic risks.

Systems That Naturally Decentralize and Those That Do Not

Buterin emphasizes that decentralization is not achieved uniformly across all systems. Using language systems like English as an example, these systems evolve naturally into decentralized forms without requiring a single administrator. Similarly, internet protocols such as TCP, IP, and HTTP are designed to resist domination by specific companies or individuals. In such systems, there is no need to deliberately avoid the concentration of power.

However, many blockchain projects do not fall into this category. Achieving decentralization requires conscious and strategic institutional design from the project team. Without this, projects will inevitably move toward centralization of power.

Balancing Efficiency and Decentralization

Buterin clarifies the industry’s real challenge: “How to build methods that maintain the efficiency and flexibility of centralization while minimizing its negative effects.” This is not an easy problem and represents a long-term challenge that the blockchain industry must continue to face.

He strongly urges all projects to fundamentally reconsider their power structures and to position the principles of decentralization as design goals of equal importance to their business models. Adopting a decentralized model is the key to sustainable and transparent project operation.