1. Coordination in Crypto-economics
2. Problems of Decentralized Governance
3. Need for Hybrid Governance Models

Ethereum co-founder Vitalik Buterin admitted not effectively communicating the complexities of “unbalanced coordination” in decentralized systems. Looking back at two blog posts he wrote in 2020 and 2021, he explores the connection between coordination and crypto-economics in blockchain governance.

Coordination in Crypto-economics

In his blog posts, Buterin highlighted the difficulties of coordination within decentralized systems. He stressed that while coordination is crucial for collective decision-making, not all forms are positive. Unbalanced coordination—where small groups collaborate at the expense of larger ones—can damage decentralized ecosystems.

Problems of Decentralized Governance

Also, Buterin’s posts examined how crypto-economics, the economic principles underpinning blockchain networks, often struggles with governance issues. Specifically, he pointed out that systems dominated by token holders, like decentralized governance models, can lead to plutocracy.

Need for Hybrid Governance Models

Buterin also emphasized the need for hybrid governance models that blend economics and politics. He regrets not communicating the importance of 'unbalanced coordination' more clearly.

Vitalik Buterin stresses that coordination in decentralized systems requires a deeper understanding and the development of hybrid governance models that can effectively combine economic and political aspects.