Will forced tech sharing curb power in crypto?
2026-01-01 • Ian Irizarry
TL;DR: Vitalik Buterin’s new essay Balance of Power warns that economies of scale now give unfettered institutions overwhelming power - in companies, states, modes of protest. He advocates for forced technology sharing and adversarial interoperability so democratic checks stay alive. For companies chasing funding, aligning with these ideas can boost credibility with savvy VCs and regulators.
Why Vitalik’s “Balance of Power” essay is a big deal for fundraising
Here’s the thing: Vitalik points out that economies of scale aren’t balanced anymore by old-school brakes like diseconomies of scale or spreading out control. Those natural checks? They just don’t cut it like before. Balance of Power
For founders, this changes the game entirely. It’s not only about growth anymore. Investors actually want to know how you handle scaling, who ends up with power, and whether control stays spread out. If you don’t make that clear, you could find yourself on the wrong side of regulators or public opinion. Vitalik on decentralization and power concentration
What exactly are “forced technology sharing” and “adversarial interoperability”?
Vitalik suggests two main tools to fight power concentration:
Forced technology sharing means laws or rules that make big companies share key tech, trade secrets, or infrastructure. A good example? The EU’s USB-C mandate or the U.S. cracking down on non-compete agreements to help talent flow. Vitalik on decentralization and power concentration
Adversarial interoperability is all about building products that plug into dominant platforms without asking permission. Think third-party apps for social media, independent repair shops for gadgets, or browser extensions that change how you see content. Vitalik on decentralization and power concentration
I’ve found these ideas aren’t just theoretical — they’re central to how Vitalik imagines keeping democratic checks on powerful companies and governments. Balance of Power
Real-life examples worth noting
This part’s shorter but important:
- Lido DAO controls about 24% of Ethereum’s staked supply. Yet it’s built with multiple operators and governance checks, so no one player can run the show. Vitalik on decentralization and power concentration
- Alternative social media clients stick to platform rules but let users switch up front-ends and filtering — giving back some control over user experience. Forklog coverage on hostile interoperability
- Employee non-compete bans in parts of the U.S. have boosted knowledge sharing and startup culture, exactly the kind of diffusion Vitalik talks about. Vitalik on decentralization and power concentration
Why VCs and funders care (and why you should too)
Risk mitigation
Investors don’t like power concentration because it brings legal headaches, antitrust issues, or bad press. Designing your startup with built-in diffusion or interoperability can lower regulatory and reputation risks. Vitalik on decentralization and power concentration
Competitive differentiation
Lots of startups claim they’ll “disrupt” markets. But few actually build products or governance models that fight centralization. If you can genuinely pull that off, you’ll stand out.
Alignment with policy trends
The EU’s Digital Markets Act, China’s tech transfer rules, and U.S. antitrust moves all lean toward forcing diffusion or interoperability. Vitalik on decentralization and power concentration
Investors increasingly pay attention to ESG, governance, and democratic impact. Showing you bake these into your model seriously boosts your street cred.
How companies can bring these ideas to life (no need to flip the switch overnight)
Governance design
- Spread decision rights around. Think DAO-style boards or multiple stakeholders.
- Give users or communities veto power on big platform changes.
- Don’t put tech, data, or UX control in just one person’s hands.
Product architecture
- Open up your APIs. Let others build on top of your platform.
- Keep your tech stack modular so parts can be swapped or extended externally.
Corporate policy moves
- Announce no non-compete clauses publicly.
- Open up some patents under fair licenses.
- Make parts of your code open-source or at least inspectable.
Fundraising tips
- Highlight how you prevent “power capture” in your term sheets and governance docs.
- Talk transparency, interoperability, and diffusion — not just in your mission but in actual practice.
- I’ve found using Vitalik’s essay as a differentiator works because few founders know about it yet.
Common investor pushbacks — and how to handle them
| Objection | Possible Answer |
|---|---|
| “Open tech hurts defensibility” | Ask: Do defensibility and monopoly power always go hand in hand? Sometimes network effects bring profits, sure, but nobody likes walled gardens. Diffusion can build trust and long-term strength. |
| “Regulation kills flexibility” | The trend is clear: mandatory diffusion is coming. Better to get ahead than scramble later. |
| “Interoperability adds complexity” | True enough. But modular design and open standards are well established now. The added complexity is manageable and pays off in durability. |
Vitalik’s quote to keep top of mind
“Either you grow with us, and share access to your secret sauce and your network on a reasonable schedule, or you grow entirely alone, and we shut you out.” Balance of Power
That really sums it up: be open, align with the new realities, or risk getting left out.
SEO keywords smart startups should weave in
To get noticed by VCs, regulators, and thoughtful founders, sprinkle in phrases like:
- “economies of scale in tech companies”
- “interoperability vs monopoly”
- “forced technology sharing policy”
- “governance for decentralized systems”
- “diffusing control in platforms”
These buzzwords come right from Vitalik’s essay and current policy talks. Balance of Power
If you’re gearing up to raise money for your startup, seriously think about how your growth plan handles these new challenges Vitalik points out. Culture, architecture, governance — none of these can be ignored. By the way, a quick heads-up: implementing forced tech sharing and adversarial interoperability isn’t always straightforward. Sometimes, legacy systems or existing contracts can make it tricky. But that’s exactly why planning early matters.
Need help weaving these ideas into your pitch or company DNA? I’m happy to help craft a tailored approach with you.