REAWAKENING ETHEREUM’S CYPHERPUNK SOUL

By: Dybsy

Ethereum stands at a crossroads.

Born from the vision of a decentralized “world computer,” it was meant to empower individuals with uncensorable applications and financial self-sovereignty. Yet, as it grows, it faces mounting pressure to conform – whether from commercialization that prioritizes convenience over decentralization, or from regulators demanding compliance at odds with privacy and censorship resistance.

This paper argues that Ethereum must realign with its cypherpunk first principles to remain true to its founding ideals and ensure its long-term resilience. In the face of corporate influence and government oversight, Ethereum’s community should recommit to the values of decentralization, privacy, and credible neutrality that sparked the blockchain revolution.

By examining insights from Ethereum’s own leaders and the original cyperphunk pioneers, critiquing key governance decisions, and charting a path forward, I present a compelling case for making Ethereum cypherpunk again – not for nostalgia’s sake, but to secure the network’s future as an open platform beyond any state or corporate control.

Ethereum’s Cypherpunk Foundations

Ethereum did not emerge in a vacuum – it was “born into a counter-cultural movement, a cypherpunk movement.”¹ The cypherpunks of the late 20^th century were a group of cryptographers and activists determined to use technology to protect individual liberty in an age of expanding digital surveillance.

They believed in privacy, decentralization, and cryptographic guarantees of freedom, coalescing around ideas like the Cypherpunk’s Manifesto, which declared: “We must defend our own privacy if we expect to have any. We must come together and create systems which allow anonymous transactions to take place ... Cypherpunks write code...”²

This ethos inspired the first cryptocurrencies and ultimately Ethereum itself.

Vitalik Buterin and the Ethereum founding team were deeply influenced by Bitcoin and the cypherpunk ideals behind it. Ethereum’s original mission was explicitly phrased in cypherpunk terms: to “build unstoppable applications, empower decentralized communities, and ensure financial sovereignty.”³⁴

In other words, Ethereum aimed to extend Bitcoin’s liberating properties (censorship-resistant money) into a platform for all forms of decentralized applications. The vision was a world where no central authority could arbitrarily shut down your software or seize your digital assets – “unstoppable applications” running on a global, permissionless network.⁵ The mantra “code is law” captured the intent that smart contracts on Ethereum would enforce rules impartially, beyond the reach of any court or regulator.

Cypherpunk philosophy is baked into Ethereum’s DNA. Gavin Wood coined the term Web3 to describe Ethereum as part of a decentralized internet stack.⁶ In this vision, Ethereum provides a trustless computation layer – a “shared hard drive” – complemented by peer-to-peer messaging and distributed storage to replace the centralized servers of Web2.⁷ Wood illustrated Web3’s architecture of Ethereum + P2P networks as an open alternative to today’s corporate cloud platforms. The goal was to “extend the spirit of open source software to the world of today” by building systems that no single entity can control or censor.⁸

From the start, Ethereum’s creators spoke the language of cypherpunks. Decentralization was not just a means but an end in itself – Ethereum was designed to “continue working even if its core developers disappear forever.”⁹ Censorship-resistance was paramount – no centralized actor should have the power to interfere with any user or dAPP, and “[c]oncerns around bad actors should be addressed at higher layers,” not by compromising the base layer’s neutrality.¹⁰ The network was to be globally auditable and trust-minimized, such that anyone could run a node to verify what’s happening.¹¹ In short, Ethereum strove to fulfill Nick Szabo’s dictum that “[t]rusted [t]hird [p]arties are [s]ecurity [h]oles” by eliminating unnecessary intermediaries and letting cryptographic protocols, not middlemen, guarantee integrity.¹²

Crucially, Ethereum expanded the cypherpunk ambition beyond digital cash. As Vlad Zamfir noted, “In Ethereum, we went much further than Bitcoin and said we didn’t just want to do this for money, but for everything.”¹³ The Ethereum community sought to apply cryptographic freedom technology to social contracts, organizations, and markets of all kinds. This aligns with Tim May’s Crypto Anarchist Manifesto, which foresaw a revolution where “[c]omputer technology provides the ability for individuals and groups to interact [anonymously]… altering completely the nature of government regulation.”¹⁴ Ethereum picked up that torch, aiming to “fundamentally alter the nature of corporations and of government interference in economic transaction.¹⁵ The very term “smart contract” (coined by Szabo) encapsulates the idea of encoding agreements in unstoppable code, beyond the reach of legal coercion.

It's no exaggeration to say Ethereum represented “a specter haunting the modern world, the specter of crypto anarchy.”¹⁶ By 2015, this specter had materialized into a live blockchain network where anyone could deploy applications that no bank or government could shut down. The launch of Ethereum realized what Hal Finney had envisioned in 1992: “The computer can be used as a tool to liberate and protect people, rather than to control them.”¹⁷ Finney’s prophetic words – written when he discovered David Chaum’s ideas on digital cash – resonate with Ethereum’s ethos of empowering users. Chaum himself, decades earlier, had championed “[s]ecurity without [i]dentification” and transaction systems to “make Big Brother [o]bsolete.”¹⁸ Ethereum’s permissionless design was a direct attempt to provide freedom from centralized surveillance and control, turning those cypherpunk theories into practice.

In summary, Ethereum’s foundational values – decentralization, censorship-resistance, privacy, open access, and self-sovereignty – are drawn straight from the cypherpunk playbook. That is why early Ethereum community members saw themselves as part of the same movement. They were not merely building a fintech platform; they were building a political and social alternative. But as we shall see, living up to those principles has become an increasing challenge as Ethereum matured and confronted the realities of mass adoption.

Drifting from the Path: Commercialization and Compliance

Over the past several years, Ethereum’s explosive growth has tested its commitment to its first principles. On the one hand, mainstream success has validated Ethereum’s utility; on the other, it has brought pressures that risk diluting its cypherpunk ethos. The 2017 ICO boom, the 2020-21 DeFi and NFT crazes, and the 2022 Merge to Proof-of-Stake each ushered in new stakeholders – traders, corporations, even governments – whose priorities can diverge from decentralization and privacy.

Ethereum’s culture and technology have shown signs of bending under these influences. As Vitalik observed, “since 2017 or so, [the original] visions have faded somewhat into the background… there is a large ideological rift” between the crypto community and the broader tech world.¹⁹ He laments that “few talk about consumer crypto payments” or non-financial dApps now, and that high fees turned the blockchain into a playground mostly for “degen gamblers” during bull markets. In Vitalik’s view, this “adjusts the... crypto space’s internal culture, [leading] to many... of the negatives [we have seen]” – a polite way to say that money and hype have partially eclipsed the early idealism.²⁰

One clear sign of drift is the increasing compliance of major Ethereum players with regulatory demands that run counter to cypherpunk values. The most glaring example came in August 2022, when the U.S. Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the Tornado Cash mixer contract. Tornado was a privacy tool allowing users to break the link between their addresses and funds – essentially Chaumian digital cash implemented via smart contract. The OFAC action effectively outlawed interaction with Tornado by U.S. persons. Shockingly, several infrastructure providers immediately fell in line. Infura and Alchemy began blocking requests to Tornado’s smart contract, and Circle froze USDC balances, and even some frontends like AAVE blacklisted those addresses.²¹ This unilateral corporate compliance undermined the notion of Ethereum as an unstoppable, neutral platform. The fact that a DeFi user could be denied access to services due to external blacklists is exactly what cypherpunks warned about.²²

More troubling was the response at the protocol level after the Merge. By October 2022, it was observed that over 50% of Ethereum blocks were being produced by relays that enforced OFAC sanctions, excluding Tornado-related transactions.²³ This was largely due to the popularity of MEV-Boost relays (like Flashbots) used by stakers to outsource block construction. In effect, a majority of block proposers were voluntarily censoring certain transactions. Martin Koppelmann noted the sad milestone when “52% of all blocks” were subject to the content curation of a single relay.²⁴ He remarked that the rapid roll-out of MEV-Boost “in hindsight was a mistake” without more safeguards against censorship, as it let one entity’s policy affect a majority of blocks.²⁵

This scenario – a supposedly decentralized blockchain where half the block producers follow government sanctions – starkly contradicts the cypherpunk ideal of routing around censorship. John Gilmore’s famous maxim that “The Net interprets censorship as damage and routes around it” underscores that even centralized actors, like an exchange that might be compelled to enforce such measures, should not dictate protocol behaviour. Decentralized networks must be resilient.²⁶ Ethereum’s reality in late 2022 was more disconcerting: the network tolerated a significant amount of censorship at its core.

Ethereum’s leaders themselves expressed ambivalence on how to handle this. Vitalik argued that if an individual home validator chooses to censor, that “should be tolerated” to avoid becoming a “morality police.”²⁷ He maintained that slashing should be reserved only for concerted attacks like trying to reorg the chain and “not [for] making wrong choices about what to put in your own [block].”²⁸ In Vitalik’s view, as long as some validators include the censored transactions (resulting in delays but eventual inclusion – what Justin Drake calls “weak censorship”²⁹), the situation, while undesirable, is tolerable. Weak censorship degrades user experience but doesn’t completely bar transactions from the chain.

The nightmare scenario is “strong censorship” – a majority actively refusing certain transactions so that they never get included.³⁰ That would mean a user’s funds could be effectively frozen on Ethereum, violating property rights as surely as a bank freeze. Fortunately, Ethereum did not reach that threshold; non-censoring validators continued to include Tornado transactions, preventing a complete lock-out. But the fact remains: the Ethereum protocol did not natively route around censorship – it relied on social coordination and goodwill to counteract it.

This tenuis state alarmed many in the community who remembered that Ethereum was supposed to be “neutral, and in such a way that anyone can see that is neutral.”³¹

Another area of concern is the centralization trend in staking and infrastructure. After the switch to Proof-of-Stake in 2022, Ethereum’s security now depends on validators who stake ETH. But over 45% of staked ETH is concentrated in a handful of providers (Lido, Coinbase, Kraken, Binance).³²

Lido alone accounts for roughly 27.5% of the stake – a level that Danny Ryan argued that no single staking entity should exceed, because it undermines security and decentralization.³³ If one provider controls greater than 33%, they could theoretically halt finality; greater than 50% could soft-fork or censor; greater than 66% could outright seize control of the chain.

Despite these risks, market forces have still favoured the largest pools (“liquidity begets liquidity”³⁴), and efforts to self-limit have been voted down, such as when Lido actively opposed Ethereum’s “no monocultures” ethos and over 99% of its voters rejected capping its market share.³⁵ This approach suggests Lido’s intent to establish a staking monopoly–indeed, its vote signaled that community concerns were less important than “growth at any cost.”³⁶

The outcome is that Ethereum’s validator set, while more geographically distributed than mining was, is still far from the ideal of decentralization. This concentration makes the platform more vulnerable to pressure; e.g., a regulator can subpoena a large U.S.-based exchange validator or a few big node operators, rather than having to coerce thousands of independent home stakers. It also flies in the face of the cypherpunk vision of many small participants instead of a few large intermediaries. Szabo believed trusted third parties frequently made mistakes or abused power, pointing out why reliance on big custodians is dangerous.³⁷³⁸ Ethereum’s reliance on Lido and centralized exchanges in staking arguably reintroduces trust parties through the backdoor.

In contrast, Rocket Pool has remained more decentralized by design, even decreasing its minimum minipool stake to 8 ETH, allowing more users to participate in securing the network. Further, Rocket Pool voluntarily took the opposite path to Lido, pledging to self-limit its own market share (around 22% maximum) and broadens its node operator base as a safeguard against any single provider dominating Ethereum).³⁹

Another promising mechanism is FOCIL (EIP-7805), which enforces “inclusion lists” at the protocol level so that even transactions targeted for censorship are forced into blocks.⁴⁰ FOCIL requires only a single honest validator in a committee to include a censored transaction, thwarting even majority censorship attempts.⁴¹

We must also consider Layer2 scaling solutions and their impact on first principles. Ethereum’s roadmap since 2020 became roll-up centric, meaning most users and transactions are expected to migrate to Layer-2 networks that post data to Ethereum but execute off-chain.⁴² Rollups like Optimism, Arbitrum, Base, zkSync, and Starknet indeed offer greatly increased throughput and lower fees – addressing a real need. But today, most rollups are not sufficiently decentralized. They often have a single sequencer node operated by the rollup’s team, which orders transactions.

These sequencers could censor or reorder transactions at will; users have to trust it (at least until there are fraud proofs or permissionless sequences). Moreover, many rollups started as multisig-controlled “Layer2s” – essentially sidechains secured by a handful of keys. Vitalik cautioned about this directly: “One can build a system that one calls a ‘layer 2’, but which is actually a highly centralized system secured by a multisig, with no plans to ever switch to something more secure.”⁴³ If such systems persist, Ethereum could devolve into a base layer that is decentralized in name only, while activity migrates to corporate-controlled networks riding on top. That outcome would be akin to using Ethereum as a settlement layer of a new set of “too big to fail” intermediaries – hardly the cypherpunk dream.

Vitalik has argued strongly against complacency here: “Resisting these pressures is hard, but if we do not do so, then we risk losing the unique value of the crypto ecosystem, and [we risk] recreating a clone of the existing web2 ecosystem with extra inefficiencies and extra steps.”⁴⁴ Vitalik reiterated the core values that must guide Ethereum development: decentralization, censorship resistance, auditability, credible neutrality, “building tools, not empires”, cooperation.⁴⁵ He gave concrete examples of what not to do – like a “staking interface that needlessly funnels users toward the already-largest staking pool”, or an NFT platform that stores data on centralized servers. Each example reflects real tendencies we’ve seen. His warning is clear: Ethereum could slip into being just another walled garden or fintech warren if economic convenience consistently trumps decentralization. In short, Ethereum faces a creeping “Web2-ification”: the growth of quasi-monopolies and chokepoints in an ecosystem that set out to eliminate them.

To be fair, Ethereum is still far more decentralized and open than traditional financial or internet platforms. It continues to be a leader in public blockchain development, and many community members are acutely aware of these issues. But the trends point to a subtle but significant shift away from the uncompromising cypherpunk stance of Ethereum’s early years. This drift is not irreversible, but it is alarming to those who believe Ethereum’s core value is as a bulwark against centralized control. Decades ago, John Gilmore noted that every system faces a tension between the “faceless organizations” that seek more control and the individuals who seek more freedom.⁴⁶ Ethereum is now experiencing that tension firsthand. The next sections will draw on thought leaders’ perspectives and specific governance flashpoints to illustrate the urgency of realigning Ethereum with its founding principles.

Voices from Ethereum’s Community: Back to Basics

Despite the challenges, Ethereum retains a strong contingent of voices advocating for the project’s original values. Many prominent figures in the Ethereum community have spoken out about the importance of decentralization, privacy, and credible neutrality – often echoing cypherpunk themes directly. Let’s highlight some of these insights from Ethereum’s thought leaders, and how they frame the need to course-correct.

Vitalik Buterin⁴⁷ has emphasized a return to first principles. He has stressed decentralization (“minimize dependence... on any single actor”), censorship-resistance (no centralized actor should block users), and credible neutrality of the base layer​. He defines credible neutrality as infrastructure that “should be neutral, and in such a way that anyone can see that it is neutral even if they don’t already trust the developers.”​

In other words, the protocol must demonstrably treat all users and transactions equally – a direct nod to avoiding biases or blacklists. Vitalik has also championed privacy. He recently implemented support for stealth addresses (one-time addresses for private receipts) and has advocated “Privacy Pools” as a successor to Tornado Cash​.

In 2022, he tweeted: “I’ll oppose regulations that harm privacy or decentralization. We don’t need KYC on DeFi frontends; that’d only punish users while doing nothing to bad actors.” This aligns with his view that Ethereum should not become an arm of financial surveillance. Instead, he encourages building public goods like zk-Snark based voting and identity tools that give individuals privacy by default​

Vitalik’s recent work on zero-knowledge proofs for identity (e.g. ZK attestations via projects like Zupass) shows a commitment to practical cypherpunk solutions – letting users prove things about themselves without revealing personal data​. He paints a picture of an “Ethereum-y cypherpunk world” where we hold assets in self-custody, use anonymity systems for privacy, and participate in governance pseudonymously​. Vitalik acknowledges the cultural drift and explicitly wants to recenter the narrative around cypherpunk values: Decentralization, open participation, censorship resistance and credible neutrality should again become Ethereum’s north star​.

Joseph Lubin⁴⁸ offers a perspective from the intersection of Ethereum and regulators, and, interestingly, he has become more outspoken in defense of Ethereum’s core principles as governments have stepped up scrutiny. In a 2024, Lubin described the U.S. SEC’s approach as “gaslighting" the industry and asserted that the agency “wants to reclassify ETH [as a security]”, which he is fighting against​. Lubin frames the conflict starkly: “Our technology is about disintermediation… giving people and communities direct financial and political agency. [The powers that be] don’t want a world where people have direct access… It’s [about]... trying to kill or slow this new technology.”​

Coming from someone who works closely with enterprises and governments, this is a strong reaffirmation of cypherpunk ethos – empowering individuals versus entrenched institutions. Lubin also insists that Ethereum post-Merge is more decentralized and secure than ever, pushing back against the SEC’s insinuation that PoS made Ethereum more centrally controlled​

He emphasizes that validators “should be seen as [earning] income… There is no investment contract” in simply participating in consensus​. Lubin’s fight with the SEC (ConsenSys suing the SEC in 2023) is essentially a fight to keep Ethereum free and open in the face of regulation. Perhaps Lubin’s most impassioned comment was: “Something unforgivable is that you [crypto companies] keep developing services trying to be banks – the world doesn’t need more banks.”​

He was referring to exchanges acting as overly compliant custodians, and urged the industry (his own company included) to not recreate the legacy financial system, but to stick to crypto’s roots of user empowerment. It’s heartening to see a figure like Lubin, often associated with mainstream adoption, publicly championing privacy and decentralization – speaking of Ethereum as part of a broader struggle for the “future of the internet” against overreach​.

Gavin Wood⁴⁹ insisted on formalizing governance (he felt Ethereum’s governance was too ad-hoc during The DAO crisis) and that on-chain decision-making was another angle of aligning protocol behavior with stated values. He feared, essentially, the governance-by-social- media approach could lead to inconsistencies in upholding principles. Wood’s perspective spurred discussion on how to make Ethereum’s governance transparent and incorruptible. Gavin also stressed technological sovereignty, coining “Web 3.0” to mean a web where decentralized protocols might replace tech giants. Today, that term is widely used (and misused), but its origin signals a direct continuity from cypherpunk ideals (anti-censorship, anti-monopoly) to Ethereum’s mission.

Balaji Srinivasan⁵⁰ wrote in his 2017 piece “Quantifying Decentralization,” (with L. Lee) that “[t]he primary advantage of Bitcoin and Ethereum over their legacy alternatives is… decentralization.”​ He introduced the concept of the Nakamoto coefficient as a measure of how many distinct entities it takes to collude to control a system​

This idea has become influential in Ethereum discussions post-Merge. For example, people note that Ethereum’s Nakamoto coefficient across various subsystems (nodes, clients, validators, etc.) should be high to be truly decentralized​.⁵¹ Balaji’s broader message was that we must measure and improve decentralization continuously, lest hidden central points undermine security​

He famously stated that “any blockchain is only as decentralized as its least decentralized subsystem,” highlighting that even if consensus is decentralized, reliance on centralized exchanges or APIs can compromise the whole. This holistic view has galvanized efforts to decentralize every layer of Ethereum – from the node infrastructure to oracles, bridges, and more. Srinivasan’s push for objective metrics serves as a reminder that decentralization isn’t a feel-good slogan – it’s a property that can be lost if not rigorously safeguarded​.

Danny Ryan⁵² has been vocal about preserving decentralization in the new Proof-of-Stake era. He sounded the alarm on liquid staking centralization, and argued that it’s not in users’ true interest to chase slightly higher liquidity. Although he is a technologist, his stance is essentially a moral and practical appeal to decentralization – recognizing that convenience (pooling into the biggest platform) can create systemic fragility. Post-Merge, Danny also highlighted the benefits PoS brought in terms of lowering barriers to participation: no need for specialized mining hardware means “it’s much easier for many participants to participate” as validators, making consensus “a bit more egalitarian”​

This reflects the intent behind PoS: to further democratize Ethereum; however, Danny knows this promise only holds if thousands of individuals do participate, rather than delegating to a few large pools. His continued involvement in research like Distributed Validator Technology (DVT) – which spreads a validator’s duties across multiple nodes – is aimed at enabling more robust, decentralized staking. In short, Danny Ryan provides a voice of technical conscience, ensuring Ethereum’s evolution doesn’t sacrifice the decentralization that secures it.

Recently, speaking at ETHDenver⁵³ in 2025 following his appointment to Etherealize, Danny talked about just doing it – that is, walking the path toward the new vision of blockchain adoption, such as Larry Fink’s call to tokenize everything. Danny argued that the regulatory pendulum always swings, and the Ethereum community has a short window in which to ensure the comeback is not too great.

Vlad Zamfir⁵⁴ offers a thoughtful counterpoint on some cypherpunk dogmas, yet ultimately reinforces Ethereum’s need to define its own rules rather than bow to external ones. Vlad infamously stated “code is not law”, arguing that the doctrine of absolute immutability in blockchains is “not a legitimate rule” in all cases​. He posited that immutability itself presents a model of governance​ – essentially, choosing never to hard-fork is itself a governance choice (one he felt was hyper-paranoid about state power​). Zamfir was a proponent of acknowledging the social layer: that sometimes the community must make decisions (as with The DAO fork) to reflect its values. Some see this as anti-cypherpunk, since cypherpunks tend to prefer strict rules over human intervention.

But Zamfir’s deeper message is that Ethereum should develop its own native governance and legal system (a crypto legal system)⁵⁵​, rather than naively hoping to be above all law. He warned that governments “will not let such a disruptive revolution take place” without challenge, and that “Ethereum needs to adapt” its legal approach​. He urged developers to plan for legal crises rather than just grow and hope to be too big to regulate​. Importantly, Vlad reminded the community that Ethereum was born from a cypherpunk, counter-cultural movement, but to fulfill its aim it might need to engage with law on its own terms​.⁵⁶ His push resulted in projects like OpenLaw and discussions around on-chain dispute resolution.

While opinions differ on how to handle governance, Zamfir’s influence ensured that Ethereum’s values were debated openly – e.g., to what extent “code is law” should hold. The fact that Ethereum did not bail out subsequent hacks (like the Parity multisig 2017) shows a nuanced balance: the community’s social consensus is ultimately what enforces the cypherpunk ethos. If the community strongly believes in no bailouts, that norm will hold. Ethereum’s social layer thus becomes the guarantor of principles – a very cypherpunk notion in itself (distrusting even code at times, trusting voluntary human consensus).

Others in the community have lent their voices: Hudson Jameson, who facilitated Ethereum core dev calls for years, often highlighted the importance of transparency and community input in decisions⁵⁷ – keeping governance participatory (he embodied the “cooperative mindset” Vitalik listed​). Justin Drake, beyond his technical work on randomness and cryptography, co-authored proposals like PBS (Proposer-Builder Separation) explicitly to mitigate MEV centralization and censorship by enshrining neutrality in the protocol​.⁵⁸⁵⁹ Drake defined the distinction between “weak” and “strong” censorship as noted, educating the community on why any drift toward the latter must be prevented​. Preethi Kasireddy, an educator and developer, eloquently wrote about the “synergies” of Ethereum’s decentralized ecosystem – how an open platform allows innovation to compound in a positive-sum way​.⁶⁰ She compared Ethereum’s network effects to the early internet, arguing that composability and permissionless innovation on Ethereum create a “whole new type of network effect” that centralized platforms cannot match​. Her perspective underscores that sticking to decentralization isn’t just morally right, it economically amplifies innovation (as dApps can plug into each other without gatekeepers)​.

Finally, figures at the intersection of Ethereum and cypherpunk activism, like Edward Snowden, although not Ethereum developers, have indirectly bolstered Ethereum’s cause. Snowden has commented that “Bitcoin’s biggest flaw is its lack of privacy” and called it an “existential threat” to an otherwise great system​.⁶¹ By extension, one can infer that Ethereum too must improve privacy or face the same threat. His statement that “lack of privacy... is the only protection users have from political change” encapsulates why Ethereum must prioritize privacy tech​. Snowden also criticized crypto services that “expose [users]” and act like banks, which directly applies to things like Infura or centralized exchanges on Ethereum​. When such a prominent privacy advocate and whistleblower engages with crypto (Snowden even helped launch the privacy coin Zcash), it sends a message: don’t lose sight of why these networks exist. They exist to empower individuals in the face of surveillance and control.

The chorus from these diverse voices is clear: Ethereum’s value proposition lies in its adherence to cypherpunk ideals. Decentralization is not negotiable; credible neutrality must be preserved; privacy needs to be protected and enhanced; and the community should proactively resist trends toward recentralization. There is also a realization that these principles must be implemented – through both technical measures and cultural norms – and not merely paid lip service. Next, we turn to concrete flashpoints in Ethereum’s history and present – from the DAO fork to OFAC compliance – to see where it succeeded or fell short, and what lessons they offer for the road ahead.

Governance Crossroad: Lessons from Key Decisions

Ethereum’s journey has been punctuated by critical governance decisions that tested its commitment to first principles. Examining these events can shed light on how Ethereum might better align with its cypherpunk ethos going forward. We will focus on a few key episodes – The DAO fork, OFAC censorship after the Merge, staking centralization issues, and the rollup-centric roadmap – analyzing each through the lens of Ethereum’s foundational values.

The Dao Fork: Code vs Law vs Values

In July 2016, just a year after launch, Ethereum faced an existential crisis: The DAO hack. An attacker exploited a bug in a prominent smart contract (the DAO) to drain 14% of all ETH. At that unique time, when forking was technically feasible and the ETH supply affected was proportionally massive, the community had to choose between adhering strictly to immutable code or intervening via a hard fork to undo the theft and restore the stolen ETH.

In a controversial decision, the majority (led by Vitalik and the Foundation) chose to fork and restore the stolen ETH to a recovery contract. This created Ethereum as we know it and a spin-off chain, Ethereum Classic (ETC), where the hack was never reversed.

This incident is often cast as a showdown between cypherpunk principles – immutability and rule by code – and human governance. Detractors say Ethereum “broke” the principle that blockchains are immutable, proving it will rewrite history under pressure, a slippery slope. Indeed, The DAO fork was a deviation from pure “code is law.” Nick Szabo was critical of the fork. Zamfir, by contrast, argued that clinging to absolute immutability in all cases is misguided. He posited that “immutability…is not a legitimate rule” if it leads to outcomes that undermine the community’s broader goals​.⁶²

The community’s rationale for the fork was to protect users and Ethereum’s reputation from a devastating exploit – essentially, to enforce the “spirit” of the DAO contract (investors’ intent) over the “letter” of its buggy code. This was an early assertion of a kind of social layer sovereignty: the Ethereum community asserted that it, not a thief, ultimately controlled the chain’s destiny.

What does this mean for Ethereum’s cypherpunk alignment? On one hand, Ethereum showed it would not be strictly anarcho-capitalist or absolutist about code – it acknowledged a role for human values and governance. On the other hand, the market punished Ethereum to an extent via the split: Ethereum Classic continued as a reminder that a faction felt the fork violated core principles (“Build unstoppable applications” – yet The DAO was stoppable). Over time, ETC’s importance waned, and Ethereum’s choice seemed vindicated as it enabled the platform to move on and flourish.

The lesson here is complex: It may be that being true to cypherpunk ideals (like empowering users and protecting them from thieves) required violating one cypherpunk axiom (immutability). The DAO fork sets a precedent that Ethereum’s community will act – in extraordinary circumstances – to defend the broader vision of a fair, open system.

Moving forward, the fork’s legacy is why Ethereum is extremely reluctant to ever fork for contract disputes again. The norm reasserted itself: “code is law” for dApps, and user beware. One can see this as Ethereum learning a middle path: use governance sparingly, but keep it as a backstop for ethos-level threats. As long as such social consensus exists, it can serve as the ultimate guardian of the network’s values (the “crypto legal system” Zamfir alluded to​).⁶³

Indeed, this dissonance was implicated very recently when ByBit was hacked by North Korea’s “Lazarus” for $1.4 billion in ETH.⁶⁴ Vitalik and others were immediately petitioned for their perspectives on a hard fork to restore funds and much community debate ensued. No hard fork occurred.

The DAO episode taught Ethereum the importance of clear values to guide tough calls – in that case, the community valued the integrity of the ecosystem over the absolutism of the ledger. Future crises (knock on wood) will likely be met with similar consideration of core principles: what course preserves Ethereum as a platform for legitimate use (not rewarding criminals or censors)? Ideally, improvements like better audited contracts, fail-safes, or insurance funds make such dilemmas rare.

Censorship After the Merge: Holding the Line on Neutrality

As discussed, after Ethereum transitioned to PoS, it encountered the censorship issue stemming from OFAC-sanctioned addresses. This was a pivotal governance challenge, even if no explicit on-chain vote occurred. The “governance” here was the collective behavior of validators and the out-of-protocol coordination to address censorship.

When more than half of new blocks became OFAC-compliant (i.e., excluding Tornado transactions)​⁶⁵, the community grew alarmed. Debates raged on Twitter and forums: Should Ethereum socially slash validators who censor? Would users accept a fork of the chain that slashed, say, major staking pools if they formed a cartel to enforce OFAC rules?

Some, like former Bitcoiner Eric Wall, argued for a “social slashing”⁶⁶ defense – essentially a user-activated soft fork that burns the stake of censors​. Vitalik and other developers signaled support for slashing in the extreme scenario of persistent wholesale censorship (strong censorship)​.

But in practice, Ethereum has not had to cross that Rubicon. Instead, efforts went into mitigating the problem: economic incentives (MEV-Boost relays that don’t censor like Ultrasound Money relay started gaining share), Proposer-Builder Separation (PBS) research to allow inclusion of censored transactions via separate channels, and community pressure on entities like Flashbots to change. Köppelmann noted in October 2022 that Flashbots and others “committed to take actions if censorship [became] worse”, indicating that mere public scrutiny was having an effect​.⁶⁷ Indeed, by 2023 the percentage of OFAC-censoring blocks dropped as new neutral relays came online and validators adopted them.

This episode is still ongoing, but it highlighted a key point: the Ethereum community by and large rejects censorship and is willing to engineer around it. It’s a real-time example of Gilmore’s principle – not automatically routing around damage, but consciously developing the means to route around it. The credible threat of a community fork or slashing likely discouraged any open collusion among large validators to enforce sanctions at the protocol level. Coinbase’s CEO Brian Armstrong even stated they would rather shut down staking service than engage in on-chain censorship, showing alignment with Ethereum’s ethos (and fear of backlash). This alignment of incentives with principles is crucial.

Still, the fact that Ethereum had no built-in mechanism to prevent greater than 50% censorship was a wake-up call. It underscored the need to “enshrine” censorship-resistance into the protocol wherever possible. One proposal by researchers (including Justin Drake) is to enshrine PBS so that block proposers can always include user-submitted “inclusion lists” of transactions they want to guarantee get in​.⁶⁸ Another idea is decentralized sequencers for rollups to avoid L2 censorship (we’ll get to rollups next).

The governance lesson is that Ethereum must be proactive: it cannot assume all validators will uphold neutrality out of goodwill. Social consensus can act as a safety net (as it did, implicitly), but technical measures to make censorship economically irrational or difficult are better. Ethereum’s credible neutrality was stressed, but ultimately not broken – a testament to the community’s shared values. This incident reinforced that the community will rally to preserve openness when confronted.

Going forward, formalizing this – perhaps with explicit protocol rules against censoring certain kinds of messages or penalties for censorship – could strengthen Ethereum’s cypherpunk cred; however, such rules are tricky (how to distinguish censorship from network issues?). More likely is continued reliance on off-chain governance to handle any blatant censorship coalition, combined with software changes to minimize its likelihood.

Staking and Infrastructure: Decentralize or Die

Another governance concern is the centralization of critical infrastructure – namely staking providers and node infrastructure. Unlike censorship, which saw an immediate flare-up, this is a slow-burning issue of ecosystem governance: how to nudge the network towards greater decentralization.

Ethereum’s protocol doesn’t currently cap how much ETH one entity can stake or how many validators a single operator runs, primarily because it is technically difficult to detect sock puppets and ensure fair distribution. It instead relies on the open market. Governance here has been more social and moral: prominent community members implore decentralization. For example, discussions on Ethereum Magicians forum and ETHResearch have floated ideas like limiting protocol rewards after a certain threshold of stake per entity, or building in-protocol shuffling of validators to mix assignments between pools. No such hard measures have been implemented (they risk unintended consequences). Instead, we’ve seen soft governance efforts: Lido, under community pressure, proposed self-limiting (which failed that vote in what can only be described as an act of defiance against Ethereum’s vision and ethos), and is now working on concepts like Lido V2 with Staking Router to onboard many more independent operators, diluting its centralization​.⁶⁹

The Ethereum Foundation and client teams continue to emphasize running your own nodes and have made running a node lighter (e.g. stateless client research, offloading history to protocols like Portal Network). The Ultrasound Money community (Ethereum proponents who highlight ETH’s deflationary aspect) interestingly also emphasize decentralization, coining the meme “decentralization maximizes ultrasoundness” – meaning if the network is decentralized, it is more secure and thus the monetary properties hold. This kind of cultural framing uses even economic narratives to push first principles.

One notable governance action was the client diversity effort. In early 2021, it was noticed that over 70% of Ethereum nodes ran the Geth client – a single codebase, a single point of failure. The community (led by people like Péter Szilágyi and Danny Ryan) rang alarm bells. Through education, grants, and setting norms, the Ethereum network by Merge time had a healthier distribution among multiple clients (Lighthouse, Prysm, Teku, Nimbus on consensus; Geth, Nethermind, Besu, Erigon on execution)​.⁷⁰

This was an example of successful informal governance for a cypherpunk goal: no monocultures. It showed that decentralization can be achieved if the community agrees it’s critical and coordinates – in this case, node operators and staking pools consciously switched or balanced clients. Ethereum’s resilience post-Merge (no client bug brought down the network) validated that push.

The broader lesson on infrastructure is that Ethereum must continuously identify centralization risks and address them through community coordination or protocol tweaks. Whether it’s reducing reliance on Infura (through light clients in browsers or alternative RPC networks like Pocket Network) or ensuring no single L2 becomes “too big to fail,” these are governance challenges that require collective action. They might not be resolved in all-hands votes, but through rough consensus and building the alternatives.

In cypherpunk terms, this is the eternal vigilance required to “guard against the risks of going too far in being community-driven”, as Vitalik put it​ – interestingly warning that community whims should not override neutrality. That cuts both ways: just as we don’t want corporate dominance, we also don’t want a mob of users deciding to, say, exclude a minority they dislike. Thus, governance must be balanced by hard “norms of neutrality”​.⁷¹

For staking, this means even if users want the convenience of one-stop staking, we as a community must educate and provide alternatives to break the tendency toward central points.

Rollups and Layer 2: Scaling Without Sacrificing Ethos

Ethereum’s embrace of rollups as the preferred scaling solution is a strategic decision with governance and ethos implications. By choosing not to massively increase base layer throughput (to keep running a node affordable), Ethereum stays aligned with decentralization at Layer 1. Instead, the plan is to push activity to Layer 2 networks that inherit security from Layer 1. This rollup-centric roadmap raises the question: can these L2s maintain Ethereum’s cypherpunk values?

In the short term, many rollups are corporate or VC-backed projects (e.g. Optimism PBC, Offchain Labs for Arbitrum, Matter Labs for zkSync). They often began centralized for speed of iteration. This has led to instances at odds with Ethereum’s ethos: e.g., Infura and Metamask blocking users on some L2s during Tornado sanctions (since those UIs were centralized). Also, a rollup operator could censor transactions or preferentially include their friends’ trades – basically recreating a mini version of a centralized system on top of Ethereum. The optimistic view (shared by Vitalik and rollup teams) is that over time, rollups will decentralize: they’ll have multiple sequencers, open validation (especially zk-rollups where anyone can validate proofs), and perhaps even community governance or alignment with ETH holders. But that transition is a governance challenge.

Critics point out the risk of L2 fragmentation – if an L2 doesn’t uphold values, users might not notice since they experience the L2 environment more than L1. For instance, an exchange could run a rollup where only KYC’d addresses can withdraw to L1, effectively creating a silo. Does Ethereum have a say in that? Possibly not directly – but indirectly yes: Ethereum could refuse to upgrade in ways that support such siloed rollups or socially oppose them. On the flip side, Ethereum has supported technologies like EIP-4844 (Proto-Danksharding) to massively reduce rollup costs​, actively fostering rollups. This is a bet that scalability can be achieved without compromising core values at L1, if rollups eventually mirror those values.

Vitalik⁷² has given guidance here too. He noted that one can launch a highly centralized system secured by a multisig and call it an L2, but that’s counter to Ethereum’s values​. The community should resist pressures to use such systems if they don’t plan to evolve toward trustlessness​. We see this in practice: truly centralized “L2s” (really just sidechains) like Polygon POS chain are not granted the same legitimacy in Ethereum circles as rollups are, precisely because they don’t inherit Ethereum security or decentralization (Polygon has its own 100 validators, which could collude). Instead, the Ethereum community tends to favor solutions that are provably secured by Ethereum (rollups publish data on L1 and have proofs or challenge periods). This preference is an expression of cypherpunk values in scaling: we prefer slower, more complex solutions if they preserve trustlessness, over quick but trust-based fixes. It shows a willingness to tolerate short-term inconvenience (needing to bridge to rollups, etc.) to uphold the long-term vision of an unstoppable, decentralized network of networks.

Governance will soon come into play as rollups themselves decentralize. For example, if Optimism transitions to multiple sequencers or community governance of its protocol, will Ethereum stakeholders get involved? Possibly – there could be cross-domain governance issues, like how to manage shared bridges or fraud-proof referees that might involve L1 contracts. Ethereum L1 developers have also considered enshrining some rollup functionality (like a common fraud proof verifier) into the L1 protocol, which has governance implications (tying Ethereum’s fate to specific L2 implementations)​. So far, Ethereum has avoided enshrining any single rollup, opting to keep L1 general. This avoids picking winners – consistent with credible neutrality.

In summary, the rollup strategy is Ethereum’s path to scale without increasing centralization at L1, and it seems largely compatible with cypherpunk principles if executed properly. The key will be ensuring rollups themselves don’t become the new centralized choke points. Governance of Ethereum may eventually extend to setting standards for rollups (e.g. requiring them to provide proofs for security, or encouraging social slashing if a rollup operator maliciously censors despite users exiting on L1). These are novel issues, but the community’s ethos can guide them: favor permissionless innovation, insist on the ability to exit to L1 (so users always retain self-custody ultimately), and promote interoperability so no L2 can become a monopoly. Vitalik envisions a future where “we can have seamless integration between on-chain tokens and off-chain attestations" secure against centralized censorship​ – essentially a tapestry of Layers that upholds freedom. Achieving that is a governance journey we are just beginning.

Across these scenarios, a common thread emerges: when Ethereum has deviated from cypherpunk ideals, either the community corrects course or consequences ensue. The DAO fork, while contentious, was arguably in service of fairness (a higher ideal). The OFAC compliance scare triggered a backlash and corrective measures. Staking centralization, if left unchecked, could erode Ethereum’s security and community trust – hence many are actively working to counter it. Rollups introduce temporary centralization, but the community is pushing them to decentralize as they mature. Ethereum’s informal governance – the debates, EIPs, social media discussions, and off-chain coordination – has been the mechanism to negotiate these trade-offs. It’s messy but has proved effective so far.

However, the pressures will only increase as Ethereum grows. What happens when nation-states actively participate in staking or try to influence protocol changes? Or when large corporations build closed-source rollups that nonetheless settle on Ethereum? Ethereum will need a strong, explicit grounding in its first principles to navigate such challenges without fracturing. This leads us to consider concrete steps Ethereum can take to reclaim and reinforce its cypherpunk ethos, so that its trajectory over the next decade bends away from centralization and capture, and toward greater freedom and decentralization.

Reclaiming Ethereum’s Cypherpunk Ethos: A Roadmap

Ethereum can re-align with its cypherpunk first principles through deliberate technical, social, and economic steps. By fortifying the properties of the network that empower individuals and resist centralized control, Ethereum will not only stay true to its values but also enhance its robustness. Here I propose a set of practical measures – a manifesto for action – that the Ethereum community can undertake to ensure the platform remains a beacon of open, decentralized blockchain technology. These steps draw on the insights of thought leaders and the lessons of past governance decisions discussed above.

1. Embed Privacy at the Heart of Ethereum: Privacy is a core cypherpunk value and Ethereum must prioritize privacy solutions at both Layer 1 and Layer 2. This means continuing to develop and deploy technologies like zk-Snarks and stealth addresses to enable anonymous transactions and account balances. Vitalik has prototyped stealth addresses for ERC-721 assets and suggests their use for ETH and ERC-20 transfers​.⁷³

Implementing EIPs that support one-time address protocols or encrypted memo fields can lay the groundwork for more private transactions. Moreover, supporting privacy-focused Layer 2s (like Aztec Network’s zk-rollup with encrypted transactions) aligns with Ethereum’s ethos – these solutions allow users to shield their activity from prying eyes while still settling on Ethereum securely. As Eric Hughes wrote, “privacy in an open society requires anonymous transaction systems”, and Ethereum should become fertile ground for such systems​.

The community should also oppose proposals that harm privacy, such as blanket KYC requirements at the protocol or client level. Instead, Ethereum can enable selective disclosure: users reveal information only when they choose, via cryptographic proofs. By championing tools like Passport (ZK identity proofs) and dark pools for trading, Ethereum can fulfill the cypherpunk promise that “an anonymous system empowers individuals to reveal their identity when desired and only when desired; this is the essence of privacy.”​

In practice, a more private Ethereum will involve integrating L1 support for things like BLS12-381 curves (for zk-SNARK efficiency) (such as is included in Pectra) and making privacy-preserving dApps first-class citizens. Ultimately, financial privacy = financial freedom, and Ethereum’s credibility as the “World Computer” depends on users being able to use it without broadcasting their entire life on-chain.

2. Harden Censorship Resistance at the Protocol Level: Ethereum should not rely on social norms alone to handle censorship – it must bolster the protocol with technical safeguards. One approach is to implement Proposer-Builder Separation (PBS) natively​.⁷⁴ By separating block proposers (validators) from transaction builders (who assemble optimal bundles), Ethereum can prevent any single builder from having too much influence. Even more, an enshrined PBS can require that multiple builders or a committee collaborate, making censorship by one party ineffective​.⁷⁵

Additionally, ideas like Inclusion Lists or Encrypted Mempools would give validators a mechanism to flag certain transactions that must be included in the next blocks or hide transaction contents until after inclusion, respectively. The goal is to design Ethereum such that even if 50% of validators wanted to censor, they technically couldn’t prevent inclusion of transactions without breaking consensus rules (and thus getting slashed). Slashing conditions themselves might be extended in future to penalize overt censorship – e.g., if a validator refuses to include a valid transactions for X slots and others pick it up, that could count as a slashable offense.

This is tricky to get right, but the principle is to encode credible neutrality into the chain’s logic. As Vitalik notes, base-layer neutrality should be verifiable​.⁷⁶ Ethereum could, for instance, randomize or constrain block contents in certain ways to foil censoring strategies. Another simpler step: continue to diversify relay and MEV infrastructure – support open-source, non-censoring MEV relays (like UltraSound, Agnostic Relay) and perhaps one day incorporate an in-protocol auction for MEV that doesn’t censor. If Ethereum remains the best example of “the network routes around censorship”, it will uphold its first principles and set itself apart from more permissioned chains. To quote John Gilmore again: “The Net treats censorship as damage and routes around it.”​ Ethereum should strive to make this literally true in its design.

3. Radically Decentralize Staking and Nodes: The community must tackle staking centralization head-on to preserve security and self-sovereignty. Encouraging solo staking should be a priority – through education, lowering hardware requirements, and perhaps incentive tweaks. For example, protocols could slightly adjust rewards: one idea floated is to give marginally higher rewards to validators beyond the largest pools (to counteract liquidity advantage). While tricky economically, it’s worth analyzing.

Meanwhile, community initiatives like SSV (Secret Shared Validators) and Obol Network that let users form mini-pools without trusting a central operator should get broad support. These allow a group of friends or a DAO to run a validator collectively such that no single one can misbehave – distributing trust and ensuring no “Lido” grows too dominant. If Lido remains huge, making it more decentralized internally (many independent node operators under the Lido umbrella) is the next-best thing, and indeed Lido is moving that direction.

On the node side, Ethereum should continue investing in light client protocols. A fully decentralized Ethereum means users shouldn’t have to rely on Infura/Alchemy to access the chain. Projects like Ultralight clients (running in browsers or phones) and Portal Network (serving historical data in decentralized ways) are crucial. When users can easily run a node or at least a trust-minimized client, the power of middlemen fades. MetaMask and other wallets can integrate such clients, reducing the silent centralization of infrastructure.

Additionally, Ethereum governance should welcome more independent participants: for instance, by supporting community staking projects (Rocket Pool, decentralized staking collectives) via EF grants or ecosystem funds. The more entities validating, the more decentralized Ethereum becomes. Balaji Srinivasan’s Nakamoto coefficient concept can serve as a KPI: Ethereum should strive to raise the minimum number of entities required to compromise it​.

Today that number might be ~4 (Lido, Coinbase, Kraken, Binance). Through the above efforts, perhaps in a couple of years it could be 10 or 20, and none with >10%. Every increment makes Ethereum sturdier against capture. Decentralizing nodes also has a political effect: it’s easier for a government to pressure a handful of companies than tens of thousands of citizens. Therefore, boosting the ranks of home stakers and node runners is not just a technical goal but a cypherpunk shield against authority.

Hal Finney dreamed of a world where “untraceable digital cash” and networks put individuals beyond financial surveillance; a widely distributed Ethereum fulfills that dream by denying any single vector for surveillance or shutdown.

4. Reinforce Credible Neutrality and Open Access: Ethereum should formally enshrine the principle of credible neutrality in its culture – and arguably, even in documentation or a “constitution.” This means making it explicit that the Ethereum protocol does not discriminate on the basis of origin, destination, or purpose of transactions. One practical step is for the Ethereum Foundation and client teams to adopt a “Credible Neutrality Policy.”

For example, they might pledge to never build protocol features that favor or exclude specific classes of users or applications. Any proposal that violates neutrality (like say, an EIP to blacklist an address or give preferential treatment to certain dApps) would be summarily rejected as against Ethereum’s mission. This norm is mostly in place already, but stating it clearly would help resolve future ambiguous cases.

Another aspect is ensuring permissionless access to Ethereum at all levels. Running a validator only requires 32 ETH and a computer – no approval needed – and this should remain so (no “staking licenses” or KYC imposed on the protocol). The same for deploying contracts: anyone can deploy any code (if they pay gas), and that neutrality must hold even under external pressure.

To solidify this, the community could produce a short Ethereum Bill of Rights – e.g., “Any user has the right to self-custody their assets, to privacy, to inclusion in the ledger if following the protocol rules, and to fork the protocol code” etc. While not an enforceable legal document, it would be a guiding light and public commitment. It could echo the Cypherpunk Manifesto in tone, updated for Ethereum’s context.

For instance: “Ethereum users are entitled to financial privacy, security, and autonomy; Ethereum will not be a tool of surveillance or exclusion.” This kind of declaration, if widely endorsed by developers, sets the expectation that even as Ethereum interfaces with the “real world,” it will maintain a permissionless core. Moreover, cooperation with other open-source and decentralized projects can amplify this stance.

Ethereum should remain compatible and friendly to networks like Bitcoin (shared ideals on censorship-resistance) and integrate with privacy networks (like partnering with Tor/I2P for network layer privacy or Filecoin/Swarm for uncensorable storage). By being part of a broader decentralized ecosystem, Ethereum strengthens the “web of trustlessness.” Vitalik listed “building tools, not empires” and a “cooperative mindset” as cypherpunk values​ – indeed, Ethereum should interoperate, not wall itself off. That way, no single platform dominates; instead, users flow through a constellation of decentralized services, with Ethereum as one core component.

The overarching point is to keep Ethereum horizontally open, never vertically integrated into a monopoly. That defends against any one actor or government capturing the whole stack.

5. Improve Governance Transparency and Community Voice: While Ethereum deliberately eschews on-chain governance (no coin voting in protocol changes), it can still enhance the openness and inclusivity of its governance process. The AllCoreDevs calls and the Ethereum Magicians forum are forums for decision-making, but these can be made more accessible. Simple steps like publishing user-friendly minutes of core dev calls (already done by contributors like Tim Beiko and others) and public issue tracking for major decisions help demystify governance. The community should also insist on a broad consensus threshold for contentious changes – effectively a social contract that protocol upgrades will not be forced through against strong opposition from a significant minority. This informal rule has been followed (e.g., ProgPoW GPU-mining change was stalled amid controversy​).

It aligns with the idea that Ethereum’s governance is legitimacy-based​ – changes need widespread legitimacy, not just a 51% majority. To realign with cypherpunk roots, Ethereum governance should favor conservatism in the base layer (to minimize attack surface and coercion potential) while encouraging experimentation at the edges (via dApps, L2s, etc.). This way, the base layer remains a neutral, stable foundation (the cryptographic commons), much like how the cypherpunks imagined fundamental protocols (like TCP/IP, PGP) being open infrastructure. One practical initiative could be to form a “Ethereum Values” working group (somewhat like ETHCat Herders but focused on philosophical alignment) to periodically evaluate whether proposals or ecosystem trends uphold the core values. This group could produce non-binding reports – for instance, assessing the state of censorship resistance or decentralization each year and recommending actions (kind of like an accountability report).

Think of it as Ethereum’s internal watchdog for its principles. By having an organized voice for values, the community ensures that efficiency or profit motives do not quietly override fundamental principles.

6. Continue Public Goods Funding for Cypherpunk Tech: The Ethereum ecosystem, via entities like the Ethereum Foundation, Gitcoin, Moloch DAO, etc., should aggressively fund projects that enhance decentralization and privacy. This includes second-layer privacy solutions (mixers, ZK-proof systems), decentralized infrastructure (hosting frontends on IPFS, building decentralized RPC networks), and alternative client implementations (to keep diversity).

It also means supporting education and hackathons to bring in developers passionate about these issues – essentially growing the next generation of cypherpunks within Ethereum. Recall that early cypherpunks wrote code and gave it away (PGP, Tor, etc.) as public goods. Ethereum’s community can mirror that: identify the gaps (like the need for an easy mobile light wallet, or a truly decentralized exchange that can’t be shut down) and collectively resource those efforts.

Thankfully, Ethereum’s culture already leans this way with things like Gitcoin grants. But scaling it up – perhaps via protocol-funded DAO funds in the future – will ensure cypherpunk-aligned projects outcompete VC-funded convenience-oriented ones. An example: instead of relying on Chainalysis or other blockchain surveillance, Ethereum could fund teams to build user-friendly coinjoin or ring-signature mechanisms that make chain analysis harder, protecting users by default.

Another example: funding community-run validator pools in underserved regions to improve geographic distribution (a form of decentralization public good). Each public good funded for Ethereum’s decentralization and privacy is an investment in the network’s long-term independence.

7. Foster a Culture of Cypherpunk Advocacy: Lastly, and perhaps most importantly, Ethereum should nurture its cultural identity as a cypherpunk project. This involves community leaders and influencers – from core developers to app developers to educators – consistently communicating why decentralization and privacy matter, especially to newcomers attracted by hype or profits. Initiatives like Ethereum Governance workshops and Ethics in Ethereum discussions at conferences (Devcon, etc.) can reinforce these values.

The story of Ethereum should be told not just as “world computer for cool apps,” but as part of a decades-long struggle for digital liberty. When people see Ethereum in the lineage of the cypherpunks, of Bitcoin, of the fight against surveillance, they are more likely to respect and continue those values. Edward Snowden’s appearances at crypto conferences (he spoke at EthCC 2022 via video) are great examples – the community hearing directly from a privacy hero galvanizes support for those causes. (But as a counterpoint, the U.S. government is aggressive with its dislike for Snowden, and thus his involvement likely fuels anti-crypto sentiment currently manifesting in regulation by enforcement).

The Ethereum Foundation could also collaborate with organizations like the Electronic Frontier Foundation (EFF) on campaigns around encryption, or with the Zcash community on privacy research – uniting the broader cypherpunk-minded communities. Internally, doing regular “decentralization checkups” – for instance, Ethereum client teams voluntarily publishing stats on diversity, staking pools reporting on decentralization efforts – makes it part of the culture to track and improve these metrics.

And of course, community members should be encouraged to actually use the decentralized tools: run a node, try a privacy wallet, experiment with posting content to IPFS via Ethereum. The more firsthand experience users have with decentralization, the stronger their commitment to it.

In essence, Ethereum needs to keep alive the restless, rebellious spirit that birthed it. That spirit can be summarized as: Don’t Trust. Verify.; Protect the user, not the powers that be.; Decentralize all the things. It means sometimes making decisions that favor resilience over short-term adoption. As Vitalik warned, if we don’t resist convenience that leads to centralization, we’ll end up rebuilding Web2 on blockchain​. Reclaiming Ethereum’s cypherpunk soul is about ensuring every layer of the stack and every layer of the community reflect the fundamental aim of empowering individuals.

By implementing these steps – embedding privacy, hardening neutrality, decentralizing participation, and strengthening its culture – Ethereum can truly “upgrade” itself not just in throughput, but in principle. The result would be a blockchain that can withstand state-level attacks on privacy or attempts at control, because its community and technology are architected to route around them. It would also differentiate Ethereum in a world where many blockchains are compromising on decentralization for speed or regulatory acceptance. Ethereum could proudly stand as the network that will not sell out.

Conclusion: A Call to Action for the Ethereum Community

Ethereum’s journey from a bold experiment to a global platform has been nothing short of extraordinary. But with success comes the temptation to compromise – to make small concessions that, over time, could transform an open network of empowerment into something unrecognizable. I have argued that Ethereum must consciously return to its cypherpunk first principles now, at this pivotal moment, to avoid drifting into mediocrity or co-option. This is not a call to revert to the past, but to carry forward the original ethos into the future with renewed focus.

The good news is that the Ethereum community already holds the keys to prevent the network from being derailed. The cypherpunk values of decentralization, privacy, and censorship-resistance are not abstract ideals here – they are active design goals, as seen in recent efforts by core developers and researchers. Vitalik’s reminder that “if we do not resist, we risk losing the unique value of the crypto ecosystem”​should ring in our ears. The unique value of Ethereum is that it enables unstoppable applications and self-sovereign finance on a scale the world has never seen. To safeguard that, each of us in the community – developers, node operators, users, educators – has a role to play.

To Ethereum developers: keep writing code that empowers and protects users. Optimize for decentralization even if it’s harder. Implement those privacy features and don’t shy away from tackling censorship at the protocol level. Remember the old cypherpunk adage: “Cypherpunks write code”​ – your code can literally preserve freedom for millions.

To ETH holders and investors: support the long-term health of the network over short-term gains. Decentralization may not pump token price overnight, but it is what gives ETH lasting value. Delegate your stake to smaller pools or run a validator. Fund public goods. Vote with your capital for projects and companies that uphold Ethereum’s values, not those who undermine them.

To dApp developers and infrastructure providers: resist the easy path of centralization. Yes, running your own servers or complying with every regulation might seem pragmatic – until it erodes the very reason users want a decentralized app. Innovate on decentralized alternatives. As Snowden admonished, “the world doesn’t need more banks”​ – so strive not to build bank-like intermediaries on Ethereum. Instead, build the tools that let users be their own bank, their own identity provider, their own custodian.

To regulators and institutions observing Ethereum: understand that Ethereum’s core principles are its strength, not a weakness. A neutered, heavily regulated Ethereum that loses its censorship-resistance will simply see innovation move elsewhere – it would be a lose-lose outcome. Working with Ethereum means accepting its fundamental properties (just as the internet’s design had to be accepted). Censorship resistance, for example, is “the only protection users have from political change,” as Edward Snowden reminds us​. Don’t push for Ethereum to become something it isn’t – engage with it on its own terms, which include openness and neutrality.

And to the Ethereum community at large, spread across Reddit, Discord, Twitter, hackathons and meetups around the world: this is your movement. The spirit of the cypherpunks lives on in each one of you who believes that technology can set us free. Speak up when you see proposals or actions that betray Ethereum’s ethos. Educate newcomers that decentralization is the feature, not a bug to be trimmed. Continue the traditions of transparency, inclusivity, and collaborative dissent that have defined Ethereum’s governance so far. As the saying goes, the price of liberty is eternal vigilance. We must be vigilant that Ethereum stays on the path of liberty.

In 1993, cypherpunk co-founder John Gilmore, photographed with dark sunglasses on the cover of Wired, declared: “The Net interprets censorship as damage and routes around it.”​

In 2025 and beyond, let it be said that Ethereum interprets centralization as damage and routes around it. That will only be true if we, the Ethereum community, make it so through our choices and actions.

Ethereum has a chance to be the backbone of a freer, fairer digital future, but only if it remains faithful to the ideals that birthed it. By realigning with its cypherpunk first principles, Ethereum can ensure it doesn’t just survive increased commercialization and regulation – it thrives without compromising what makes it special. The world needs a decentralized global platform now more than ever, as financial systems and social media become ever more centralized and surveilled. Ethereum can rise to that occasion by doubling down on decentralization and privacy.

In closing, remember Timothy May’s rallying cry from the Crypto Anarchist Manifesto: “Arise, you have nothing to lose but your barbed wire fences!”​ For Ethereum, those fences represent the old paradigm–centralized control, compromised privacy, and permissioned innovation. Ethereum was built to tear down such barriers. Now is the time for the community to recenter on its cypherpunk first principles, to write code that protects freedom, and to build a blockchain that lives up to the ideals of its pioneers.

The call to action is clear: Keep Ethereum free, decentralized, and true to its cypherpunk legacy.