Crypto’s technical debt: 10 items on the backlog

The following is a guest post from John deVadoss, Co-Founder of the InterWork Alliancez.

The crypto universe is currently obsessed with generative AI, with the notion of “Agents,” putatively powered by crypto “rails” and coordinated via on-chain smart contracts. This is not a good idea for the simple reason that one cannot build “Agents” on the stochastic quicksand that is a Large Language Model (LLM). LLMs have a role to play with respect to the creative generation of ideas and content (e.g., code); however, the same creativity manifests via malicious latent behavior, i.e., deception. Caveat venditor.

It is also in vogue to discuss quantum computing—towards post-quantum encryption and “futureproofing” crypto protocols. Elliptic-curve cryptography, as currently implemented, is a risk, yes; however, much of the remaining surface area is at best subject to polynomial scale threats, and access to quantum will likely result in lifting all boats (e.g., Proof of Work becomes that much harder for everyone). But here is the nub: real-world quantum computing is a few decades away. Hakuna Matata.

While we are distracted by these shiny new objects, core design priorities, choices, and trade-offs are accumulating rust and are at risk of becoming “good enough” when they should be aggressively reexamined. I list 10 of these below:

1. Social Consensus. If ever there were an anachronism in the crypto ecosystem, this concept of “Social Consensus” exemplifies it. Social Consensus is how so-called community leaders run their clans; it has no place in a crypto protocol in the year 2025.
2. On-chain Governance. Following on from social consensus, what happened to on-chain governance? Too difficult? Did we just give up? And yet, we believe we can govern AI Agents on-chain?
3. Miner-extractable Value.Is it now acceptable that miners and block proposers can siphon revenue by manipulating how transactions are prioritized, excluded, rearranged, or altered in the blocks?
4. The Oracle Problem. Has it now become conventional wisdom that the oracle problem is an economic problem and is no longer a technical problem? Is this collateral damage from the shift to Proof of Stake? And isn’t this a slippery slope back to pseudo-centralization?
5. Centralized Stablecoins. Talking about centralization—aren’t centralized stablecoins essentially CBDC-lite? Why the two-faced pushback on (private) Central Banks when the wheels of crypto are greased by (private) centralized stablecoins?
6. Settlement Layers; and L1s vs L2s.There is no such thing as a settlement layer, and there is no such thing as an L1 vs. L2. Any chain (including so-called L1s and alt L1s) can become an L2 of another chain by posting ledger data and deploying a bridge contract. We have to stop confusing ourselves and clean up the terminology.
7. Privacy. Somewhere along the way, we have lost the spirit of the Cypherpunk and the imperative for privacy. Perhaps the concept of Privacy Pools is how crypto protocols will eventually balance regulatory compliance and privacy. Fwiw, it will be a first-rate use of zero-knowledge proofs.
8. Rollups. In practical terms, Rollups done right are mini-blockchains. Unfortunately, they have flown mostly under the radar and gotten away with a host of issues—from multi-sig rug-pulls through to centralized sequencer MEV and CR, and all the way in between. We need a whole-scale clean-up of terminology and execution semantics regarding rollups.
9. Centralized staking and block building. With the mandate to move to Proof of Stake, we are stuck with the increasing consolidation (centralization) of both staking and block building. Increasingly, this weakens censorship resistance, as private order flows dominate. This takes us back full-circle: whither permissionless and trustless? Or do we not care as long as the number goes up?
10. Public goods funding. Number goes up brings up the longer-term challenge and question of funding public goods. The opportunity continues to be front and center for crypto protocols to play a unique and meaningful role in funding public goods. We need to remind ourselves that this is a high-priority backlog item.

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