Ethereum (ETH) co-founder Vitalik Buterin has issued a stark warning about the future of crypto, arguing that the industry risks becoming irrelevant if it continues prioritizing speculation over meaningful applications, particularly as centralized artificial intelligence systems gain influence over digital coordination.
Speaking in an interview, Buterin said Ethereum’s core technology has made significant progress over the past year, but that success at the infrastructure level has not translated into applications with real social or governance impact.
He framed this disconnect as the most serious threat facing the ecosystem.
From Scaling Progress To Application Drift
Buterin pointed to major technical advances across Ethereum, including higher gas capacity, improved Layer 2 scalability, zkEVM deployments, and better wallet infrastructure.
These developments, he said, have largely addressed the bottlenecks that once constrained decentralized applications.
Despite this progress, he argued that the application layer has drifted away from its original ambitions.
Early visions of decentralized governance, collaborative platforms, and alternatives to centralized services have been replaced by token-weighted voting, memecoin speculation, and short-term financial incentives.
Crypto, he said, has achieved financial success while losing clarity around governance and purpose.
Why AI Raises The Stakes For Ethereum
Buterin framed artificial intelligence as the factor that makes crypto’s mission more urgent, not less.
He warned that if decentralized systems fail to deliver real utility, the future of digital coordination could be dominated entirely by centralized AI platforms controlled by corporations or governments.
Ethereum’s role, he said, is to function as a permissionless system where humans, organizations, and AI agents can all hold assets, transact, and participate in governance without requiring approval.
In that sense, blockchain infrastructure is positioned as a counterbalance to what he described as the risk of digital totalitarianism driven by centralized AI.
He cautioned against combining AI and crypto simply for novelty, arguing that Ethereum’s base protocol does not need to change to accommodate AI.
Instead, he said the intersection should occur at the application layer, where blockchain can provide AI agents with financial autonomy, verifiable identity, and transparent coordination.
Governance And Oracle Weaknesses Remain Unresolved
Buterin also highlighted persistent weaknesses in decentralized governance and data infrastructure.
He criticized token-based voting systems for encouraging concentration of power and fragile decision-making, and said many decentralized autonomous organizations have failed to define clear goals or effective governance structures.
On prediction markets, he acknowledged their growth but questioned their long-term social value when focused primarily on short-term price movements or sensational outcomes.
He pointed to governance models such as futarchy as more promising alternatives, though still largely experimental.
He also warned that current oracle systems remain a structural vulnerability for DeFi and real-world applications, citing risks associated with both centralized data providers and token-voting-based models that can be distorted by incentives.
A Narrowing Window For Meaningful Adoption
Looking ahead, Buterin said Ethereum’s long-term relevance will depend on whether developers can build applications with genuine social significance.
He identified decentralized social networks, smarter DAOs, and non-fiat-anchored stable value systems as areas where meaningful progress remains possible.
The primary risk, he said, is not technical failure but stagnation, a future in which powerful decentralized infrastructure exists, yet is used mainly for speculation while centralized AI systems define ownership, identity, and coordination elsewhere.
Read Next: 5 Years After GameStop: Robinhood Plans Tokenized Stock Trading With Self-Custody And DeFi Features