Buterin criticizes token voting: warns it could erode Zcash's privacy

Vitalik Buterin has warned the crypto community about the risks of token-based governance in Zcash. The Ethereum founder argued that prioritizing economic benefits would threaten the privacy of the industry-leading protocol.

The co-founder of Ethereum issued a direct warning about the dangers of implementing token-based voting systems within the Zcash ecosystem. In his view, adopting this mechanism would not represent an evolution, but a step backward that would jeopardize the project's most valuable feature: its ability to guarantee financial anonymity.

Zcash has established itself as one of the most important privacy cryptocurrencies in the ecosystem, serving as a technical standard thanks to its pioneering implementation of zero-knowledge proofs. However, the pressure to modernize its decision-making structures has opened the door to participatory governance models similar to those of DAOs. For Buterin, this path is a strategic mistake. 

The founder of Ethereum maintains that hand over control to token holders This exposes the protocol to perverse incentives, where the pursuit of short-term profitability could dismantle the privacy safeguards that define the network. Their position suggests that the current model, while imperfect, offers superior protection against the erosion of digital rights.

The fragility of principles in the face of profitability, according to Buterin

Vitalik Buterin's central argument lies in the nature of market behavior. Token voting operates under a plutocratic logic where Decision-making power is proportional to the capital investedIn this scenario, the main incentive for the average voter is usually asset appreciation. 

Voices within the community, such as the analyst known by the pseudonym Darklight Z, have supported Buterin's thesis, pointing out that markets optimize profits, not civil liberties.

For Buterin, the risk of Zcash's voting-based governance model is tangible: if, in a hypothetical future, removing Zcash's privacy layers promised an immediate increase in the token's market value, governance based solely on investor votes would likely approve such a measure. This would transform Zcash into a generic financial instrument, stripping it of its social function as a tool for resisting surveillance. 

With this warning, Buterin seeks to highlight that privacy is a fragile public good that requires firm protection, which would rarely align with the speculative interests of a mass of retail or institutional investors focused, hypothetically, on return on investment.

The dilemma of decentralized coordination

Despite Vitalik Buterin's warning about the risks of token-based governance, there are divergent viewpoints within the blockchain community that value this mechanism from a different perspective. A prime example is Tornado Cash, a cryptocurrency mixer whose community demonstrated how the collective participation of token holders can be crucial for to maintain a protocol in adverse circumstances. 

When the core developers of Tornado Cash were arrested and sanctions were imposed on the code, it was the token holders who made the decision and approved fundamental updates to keep the protocol active.

The investor known on social media as CryptoWhiz said Thanks to token-based governance, TORN holders were able to vote on and approve essential updates that ensured the continuity and operation of Tornado Cash. He argues that this demonstrates that while token-based governance can bring risks and complexities, it also functions as a collective defense system that enables coordination and rapid response when traditional or centralized leadership is attacked or neutralized.

In short, the involvement of high-profile figures like Vitalik Buterin in Zcash's internal politics demonstrates that the stakes extend far beyond a single cryptocurrency. It highlights the importance for the community of defining how to balance decentralization and active participation without sacrificing fundamental values ​​such as privacy.