- Buterin warns crypto projects are faking decentralization with hidden controls.
- Insider threats and insecure interfaces expose users to major risks.
- True decentralization requires smaller codebases and no secret backdoors.
Ethereum co-founder Vitalik Buterin has sounded an alarm over what he sees as major threats undermining the credibility of decentralization in the cryptocurrency space.
Speaking at the Ethereum Community Conference in Cannes, Buterin warned that many projects claiming to be decentralized actually rely on insecure, centralized components that endanger user trust.
He noted that the industry’s growing attraction to governments and companies has resulted in trade-offs undermining decentralization. Buterin states that developers are making user autonomy an afterthought to bring about institutional acceptance.
Buterin outlined three tests any crypto project must pass to demonstrate real decentralization. The first is the so-called walk-away test, which verifies that the users can continue to access their resources and services in case the entire project team goes missing.
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The second is the so-called insider attack test, which tries to replicate what a malicious actor within the organization is capable of. When data like this test is ultimately revealed, it can show just how much control developers or insiders really have, even in these supposedly no longer decentralized systems.
Another key standard is the “trusted computing base test,” which evaluates how much code users are required to trust. Smaller codebases also limit possible attack surfaces and allow easier auditing and system protection.
Decentralization Claims Undermined by Centralized Backdoors and Weak Interfaces
He criticized many layer-2 networks and DeFi platforms for relying on secret upgrade paths and insecure user interfaces. Buterin argued that these hidden controls make user assets vulnerable, creating single points of failure that attackers could exploit.
Another aspect of decentralization is privacy, which is also a weak point. Nevertheless, Buterin cautioned that technology such as zero-knowledge proofs provided incomplete security as long as users relied on centralized authentication systems.
Such systems may leak personal information, and that is not the intention of having secure and confidential transactions.
With a decade of Ethereum, Buterin asked the community to focus again on building systems that are self-sustaining, with the target of breaking internal threats. He cautioned that the Ethereum technology might become obsolete with undetermined structural flaws in the event that the existing trends persisted.
He concluded by urging the development community not to depend on trusted intermediaries and to streamline code to maintain true decentralization.
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