The new ‘decentralization theater’: Crypto projects are still controlled by the few | Opinion

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Crypto has always promised something radical: shared ownership, collective decision-making, and communities empowered by technology. From Bitcoin’s (BTC) pseudonymous roots to Ethereum’s (ETH) programmable governance, the narrative of decentralization has inspired millions to participate in reshaping the future of finance and culture. And yet, in 2025, the reality might feel more like a performance than a transformation.

Today’s most celebrated web3 platforms still rely on decision-making models that look surprisingly centralized. The teams that launch “community-owned” protocols often retain control long after the initial fanfare fades. Token voting systems give outsized power to wealthy insiders. And communities (the very people meant to govern, guide, and grow these ecosystems) are increasingly sidelined…

The result is a growing disillusionment across crypto circles: Has decentralization become just another buzzword?

The token distribution dilemma

One of the main culprits behind this credibility gap is token allocation. Many blockchain projects begin with investor-heavy cap tables, where venture capital firms, strategic partners, and founding teams receive a majority of the tokens (often at discounted prices during private rounds). When the token eventually becomes publicly tradable, the community enters late, buying in at higher valuations and holding far less governance power.

The implications here are clear. From the very beginning, unfortunately, community ownership is more a slogan than a structure. The majority of votes and incentives remain concentrated in the hands of early insiders, leaving everyday users with little more than symbolic influence over decisions that affect protocol upgrades, treasury usage, or partnerships.

This dynamic mirrors patterns we’ve seen elsewhere in culture. Think of fan communities that build enormous value around a franchise only to watch corporate executives dictate the creative direction. What web3 promised was different: a system where fans, users, and builders could actually co-create, steer, and benefit from the networks they supported. But the infrastructure hasn’t caught up to that vision.

Governance as performance

Governance systems are supposed to embody decentralization. In theory, they allow protocols to evolve through consensus with users proposing and voting on changes. But in practice, most crypto governance still runs on a “one token, one vote” model. That means those with more capital have more say. And those with the most capital (often early investors) can effectively shape outcomes with minimal input from the broader community.

Turnout in governance votes tends to be very low. Quorum thresholds are sometimes manipulated. Proposals can be buried in technical language, discouraging participation from anyone outside the inner circle. Even in cases where forums exist for open discussion, the decision-making process often happens off-chain, in private chats or founder group threads. Community sentiment may be acknowledged, but it rarely changes the outcome.

This isn’t an accident; the industry has quietly built systems that simulate decentralization while keeping control tightly held. It’s not unlike early gaming experiences where fans could “choose their own adventure,” but within a rigid, closed-loop world. You could pick your character’s outfit, but not the narrative. 

Crypto communities today are often left in a similar position: active participants in name, passive observers in reality.

The cultural cost of centralized web3

Undoubtedly, communities are the heart of crypto. They onboard new users, educate curious skeptics, build experimental tooling, and create viral memes that shape the cultural relevance of protocols. But when communities begin to realize that they have no real agency, participation falters. 

Builders stop contributing. Advocates lose interest. The energy that once animated a protocol dissipates.

This goes beyond idealism. There are practical risks to centralized control in decentralized packaging. Projects lose resilience, innovation slows, and network effects weaken. Perhaps most importantly, users begin to trust less, and not just in one project, but in the entire narrative of web3.

And it’s not only users who are paying attention. Regulators have started to scrutinize whether governance systems are genuinely decentralized or just a mechanism to avoid accountability. When tokens are held by a few and decisions are made by fewer, projects risk being classified as securities. That classification brings legal consequences, exchange delistings, and operational restrictions that can stall even the most promising ecosystems.

Can the industry redeem its own narrative?

The truth is that the tools for genuine decentralization exist; they just require intentional design. Token voting could be replaced with mechanisms like quadratic voting, delegated councils, or contributor-based reputation systems. Community treasuries could be structured to prioritize long-term contributors and creative experimenters, not just short-term returns.

There’s already a broader cultural shift happening in corporations and beyond—just look at the activist shareholders or fan-driven entertainment franchises. What these many movements share is a desire for meaningful participation—people investing not just money, but time, care, and expertise into causes and characters they believe in.

Crypto has the potential to take that idea further. Imagine decentralized intellectual property systems where fans govern the direction of a character they helped create. DAOs that commission content or merchandise simultaneously with communities aligned by values, vision, and upside. That model is already emerging in pockets of the web3 space, but it requires a fundamental shift: away from performance, toward shared power.

The path forward

Crypto doesn’t need to abandon decentralization; it just needs to take it seriously, which means recognizing where the current model fails, redesigning governance for inclusion and transparency, and reallocating power where it belongs: with the people building and believing in these networks every day.

If that shift happens, decentralization will no longer be a branding tool, and those conversations will no longer be necessary. It will become what it was always meant to be: a shared structure of value, ownership, and creativity. If it doesn’t, the industry will find itself increasingly isolated, not just from regulators, but from the very communities it claims to empower.

Arthur Azizov

Arthur Azizov is the founder and Investor at B2 Ventures. Arthur is a seasoned entrepreneur with more than 15 years of experience in fintech and financial markets. He has invested in multiple projects, leading the way in financial technology innovation and reshaping how businesses interact with liquidity, trading, and payment services. Arthur’s entrepreneurial path began in 2007 with a payment terminal business, which gave him practical insight into financial systems. In 2008, he transitioned into professional trading, gaining experience in FX, futures, and stocks. This combination of business operations and trading knowledge laid the foundation for his next major venture, B2BROKER, which was established in 2014.