Buterin cautions Zcash that token voting could undermine privacy and favor wealthy holders over community interests.
Ethereum co-founder Vitalik Buterin warned Zcash against adopting token-based governance. He cited threats to privacy and long-term values. In a November 30, 2025, social media post, he criticized how decisions left to the “median token holder” might erode Zcash’s core privacy principles. Buterin called token voting subpar to the governance that the project currently has.
Token Voting Could Threaten Zcash’s Privacy Foundations
Buterin underlined the fact that token-based governance tends to concentrate decision-making power with wealthy holders. “Markets are plutocracies,” he pointed out. He said the big holders might be more interested in short-term run prices.
I hope Zcash resists the dark hand of token voting.
Token voting is bad in all kinds of ways (see https://t.co/Cvl7CFVgtc ); I think it’s worse than Zcash’s status quo.
Privacy is exactly the sort of thing that will erode over time if left to the median token holder. https://t.co/NbRqGLOrpj
— vitalik.eth (@VitalikButerin) November 30, 2025
This is over long-term protocol integrity. Privacy features may have been removed temporarily, raising the value of the token. Token holders could, moreover, vote in the affirmative. This, in turn, defeats the purpose of Zcash’s central mission.
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The co-founder of Ethereum also touched on the “tragedy of the commons”. Smaller holders here have no incentive or power. They do not do research proposals. This leads to wealthier stakeholders influencing outcomes. He emphasized that such conflicts of interest could undermine benefits to the entire community. This may also result in a decline in trust in the governance process.
Alternative Models and the Historical Context
Buterin has in the past proposed off-chain Retroactive Public Goods Funding (RPGF) rounds for Zcash. This, furthermore, potentially uses anonymous voting. His philosophy encourages the project to be “conservative on technology, insistent on privacy, experimental on economics.” Zcash’s governance has, thus, slowly evolved. It distributes development on teams such as the Electric Coin Company and the Zcash Foundation.
The community is still debating governance reforms. These include bicameral or hybrid voting amongst stakeholders. Buterin’s warning, moreover, comes in line with broader concerns with token-based governance. This is in privacy-oriented cryptocurrencies. It highlights the potential dangers to long-term resiliency.
As of now, Zcash (ZEC) is trading at $457.17, according to CoinMarketCap. It is down 0.71% in 24 hours. Despite experiencing short-term volatility, the token has been up 25.21% over the past 30 days. Buterin’s warning could have an impact on investor perception. This puts a premium on privacy as opposed to conjectural returns.
Zcash Community Weighs Governance Reforms After Buterin’s Caution
Experts say Buterin’s caution is a reflection of a growing debate. This is on the limits of tokenized governance. Projects that strike a balance between decentralization and privacy must carefully weigh the incentives to token holders. Zcash’s method, therefore, could act as a model for other privacy-focused protocols. It shows that governance mechanisms have an enormous impact on the integrity of technology and trust in communities.
By occupying the space between privacy threats and governance challenges, Buterin shows the importance of careful design. Token-based voting may bring the benefit of efficiency. However, it has the potential to threaten long-term principles that define privacy-focused networks. The current discussions in Zcash’s community will likely set its roadmap. They will also have an impact on wider crypto governance practices.
In summary, Buterin’s warning highlights the potential of token-based governance to undermine privacy and to benefit those who can afford to hold them. For this reason, Zcash needs to carefully design its governance in order to maintain long-term values. Moreover, persistent debates in the community and alternative models could be used to steer the project, ensuring both technological integrity and trust in privacy-focused networks.