Ethereum co-founder Vitalik Buterin has acknowledged that he has not effectively conveyed the complexities of "unbalanced coordination" in decentralized systems. In blog posts from 2020 and 2021, he explores the relationship between coordination and crypto-economics in blockchain governance.

Buterin emphasizes the challenges of coordinating within decentralized systems and the negative impact of unbalanced coordination, where small groups collaborate to the detriment of larger ones. He also highlights the issues faced by token holder-dominated systems, such as decentralized autonomous organizations (DAOs), where a small group with more tokens can wield disproportionate power.

These governance structures can lead to suboptimal outcomes as decisions are driven by financial incentives rather than the long-term health of the system. There is also a risk of collusion among groups. To address these limitations, Buterin suggests hybrid governance models that combine economic incentives with political decision-making structures.

He proposes a council composed of representatives from various stakeholder groups to ensure decisions are made in the best interest of the ecosystem. This approach aims to balance economic incentives with political governance, reducing the risk of plutocracy and improving system stability.

In the future, Buterin believes that blockchain governance will involve a combination of crypto-economic principles and traditional political structures. He emphasizes the need for adaptation to prevent plutocracy, promote broad participation, and protect against collusion.



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