As the host of Blockchain Banter, I recently sat down for an open discussion with 21 from PawChain and Dr. Mark Richardson from Bancor and Carbon DeFi to explore a question that has been quietly emerging in the background of the crypto industry: Does decentralization still matter?
Decentralization was once the core ideology of blockchain, the defining principle that set this technology apart from traditional finance. But as crypto continues to evolve — and as we welcome institutions, ETFs, and direct government involvement — the meaning and importance of decentralization seem to be changing.
https://x.com/BTC_Archive/status/1890538039555895752
With that in mind, we dove into some of the biggest questions surrounding decentralization, including:
Do people still care about decentralization?
Are projects using decentralization as a marketing tool rather than a fundamental principle?
If it’s not decentralization, where is the industry focus now?
The Changing Meaning of Decentralization
According to 21 from PawChain, decentralization is still part of the conversation, but it no longer holds the same weight as it did when blockchain first emerged.
“It’s definitely still a thing, but I don’t know if it has the same ideals that it did when it first hit the space. Now, it’s primarily used as a buzzword — an attention grabber.”
He pointed out that many projects claim to be fully decentralized as a way to market themselves, but there is often confusion around what that really means. Are we talking about decentralization in governance? Tokenomics? Team structure? Infrastructure? These are all different aspects of decentralization, but they are often lumped together and misunderstood.
“Decentralization originally came from the idea of ensuring no one owned your crypto — not your keys, not your coins. But today, projects use it in all kinds of different ways. It’s become diluted.”
https://x.com/Here2DeFi/status/1891623634587803779
Is Decentralization Being Eroded?
Dr. Mark Richardson agreed that the meaning of decentralization has shifted, and in some cases, it’s eroding entirely.
When Bitcoin first emerged in 2008, decentralization was not just an ideology — it was a necessity. Bitcoin was a protest against government-controlled money, offering an alternative financial system that didn’t rely on banks, institutions, or centralized authorities. But today, we’re seeing the same governments that Bitcoin was meant to circumvent now embracing it.
“People are applauding the US government even talking about setting up a Bitcoin reserve, celebrating it as if this is what we wanted all along. But originally, the goal was to exclude governments from the system — not invite them in.”
He goes on to say the same pattern can be seen in Ethereum. It started out as more decentralized than Bitcoin, but today, large validators like Lido control a majority of the stake.
“Ethereum’s transition to Proof-of-Stake was supposed to further decentralization, but now you have two-thirds of the stake concentrated in a single entity. That’s the opposite of decentralized.”
The big question: Are these natural growing pains, or is decentralization being quietly phased out?
The Trade-Off Between Decentralization and Growth
Decentralization is incredibly difficult to maintain. As crypto assets like Bitcoin and Ethereum become more integrated into traditional finance, the centralization of miners, validators, and token ownership seems inevitable.
Mark pointed out that Bitcoin’s security model is increasingly reliant on institutional support. If the Bitcoin price drops too far, mining profitability disappears, and the hash rate collapses, making it easier to attack the network. In that scenario, governments or institutional investors may be the ones stepping in to keep Bitcoin running.
“The idea that Bitcoin is fully decentralized is already questionable. As more institutions enter the space, Bitcoin is becoming a traditional commodity rather than an independent system.”
https://x.com/VivekGRamaswamy/status/1891934819346477460
So where do we draw the line? When does decentralization stop being a core principle and start becoming just a talking point?
What is the Industry Focusing on Now?
If decentralization is no longer the industry’s guiding principle, what has replaced it?
According to 21, the focus has shifted toward collaboration and interoperability.
“For years, Web3 was about putting power back in the hands of the people. But then we had a crypto winter, and mass adoption became stagnant. Now, the focus isn’t just decentralization — it’s about making blockchain work together.”
Instead of competing, projects are realizing that interoperability is the key to survival. We’ve moved from fragmented liquidity and siloed blockchains to a more connected system where chains, dApps, and protocols are starting to work together rather than against each other.
“We’ve been screaming mass adoption for years while arguing amongst ourselves on Crypto Twitter. Instead of fighting over the same 5% of users, imagine what we could do if we worked together.”
Is Open-Sourcing Everything Still the Answer?
A related issue we discussed was the ethics of open-source development. The crypto industry has long embraced open-source software, but is this always the best approach?
21 argued that while open-source code has benefits, it also allows bad actors to exploit the system.
“We have a powerful system here. If we say we’re replacing traditional finance, that comes with responsibility. We need to draw the line somewhere — otherwise, you get 13-year-olds copying code and launching projects that turn into scams.”
Mark added that open-source software is often inefficient and can be easily manipulated.
“Open-source has some advantages, but it also creates vulnerabilities. North Korean hackers have been exploiting open-source projects for years by injecting malicious code into pull requests. There are real security risks to putting everything out in the open.”
The solution? A transparent but proprietary approach — where code can be audited for security purposes but still retains licensing restrictions to prevent outright copying.
Final Thoughts: Where Are We Headed?
Decentralization is still a core principle of blockchain, but it no longer drives the industry in the way it once did. Instead, the focus seems to be shifting toward practicality, security, and interoperability.
We’ve learned that decentralization doesn’t happen naturally — it needs to be actively maintained. But as crypto moves deeper into traditional finance, the industry must decide what kind of decentralization actually matters.
Are we okay with governments holding Bitcoin reserves? With large validators controlling Ethereum? Or do we push back and re-establish decentralization as a non-negotiable?
Blockchain Banter
Breaking down and debating the biggest conversations in crypto- live and unfiltered.
🎙️ Follow me on X at x.com/Here2DeFi and tune in every Wednesday at 3PM UTC.
https://x.com/Bancor/status/1887156340558282963
Project Updates
Before wrapping up, 21 and Mark shared updates on their projects.
PawChain (21)
“PawChain is pioneering true blockchain interoperability, eliminating the need for third-party bridges and allowing assets to move seamlessly across Ethereum, Polygon, BNB, Avalanche, Optimism, Celo, and even Solana.”
Bancor & Carbon DeFi (Mark Richardson)
“Bancor pioneered AMMs in 2017 and continues to lead with asymmetric liquidity, automated trading strategies, and a built-in arbitrage system (Arb Fast Lane). Carbon DeFi is live on Ethereum, Sei, and Celo, with licensed deployments on Base, Fantom, and more.”
Blockchain Banter is a live, unscripted discussion series where industry experts, builders, and thought leaders come together to share knowledge, challenge ideas, and explore the evolving landscape of DeFi and blockchain. Tune in weekly to join the discussion!
