StarkWare CEO Ben-Sasson Predicts Demise of Centralized Corporate Blockchains

Executive Summary

StarkWare CEO Eli Ben-Sasson states corporate blockchains will fail without true decentralization, igniting debate on Web3's future and enterprise adoption strategies.

The Event in Detail

Eli Ben-Sasson, co-founder and CEO of StarkWare, has reiterated his assertion that corporate-controlled blockchains, or "corpo chains," are unlikely to endure. Ben-Sasson contends that these networks contradict the fundamental principle of blockchain technology, which is to eliminate the need for a central controlling entity. He emphasizes that while blockchain technology is inherently complex, its core value proposition lies in decentralization and self-custody. According to Ben-Sasson, without these elements, blockchain becomes an "inferior technology to anything centralized" and a "useless technology" with "no future."

Ben-Sasson acknowledges that corporate interest in adopting blockchain technology is a positive indicator for mainstream awareness. However, he predicts that such chains will eventually be abandoned due to technical complexities and a lack of appeal from a decentralized finance (DeFi) and self-custody perspective. He suggests that users will ultimately avoid these platforms if they do not offer the control over assets that decentralized systems provide.

Market Implications

The commentary from Ben-Sasson intensifies the ongoing debate surrounding enterprise blockchain strategies and the core values of Web3. While some experts argue that corporate blockchains prioritize scalability, compliance, and control to reinforce traditional institutions, others like Ben-Sasson maintain that these compromises dilute the ethos of permissionless innovation. This philosophical divide could influence how corporations approach future blockchain integrations, potentially pushing them towards more decentralized models or away from proprietary chains that do not align with Web3's foundational principles.

Evidence from past projects supports skepticism regarding the longevity of purely corporate-controlled blockchain initiatives. Several trade-related blockchains, including Trade, TradeLens, Marco Polo, and Contour, have failed in recent years. Even Komgo, a trade finance platform, survived by ultimately discarding its blockchain infrastructure in favor of a traditional centralized database, indicating that blockchain was perceived as a hindrance to efficiency. These instances suggest that a lack of intrinsic blockchain value or an inability to achieve industry-wide consensus on a single platform can lead to abandonment.

Expert Commentary

Within the crypto community, there is a split perspective on the future of corporate blockchains. Some analysts suggest that many corporations may not genuinely require blockchain technology, or that their use cases are better served by traditional centralized systems. Conversely, proponents argue that corporate networks can offer more user-friendly solutions and applications compared to crypto-native networks, particularly for existing large user bases who may not possess extensive crypto knowledge. These corporate chains often integrate with public crypto-native networks to facilitate a seamless flow of value, operating in hybrid ecosystems that combine permissioned and permissionless systems.

However, a counter-argument points to "hidden centralization" within Web3 itself, where many projects, despite their decentralized claims, are influenced by centralized corporate structures and venture capital funding. This can lead to top-down governance that contradicts the decentralized ideals, potentially creating single points of failure and eroding user trust. Ben-Sasson's perspective underscores that the value derived from blockchain technology is fundamentally tied to its ability to remove central authorities, a benefit he argues is lost in corporate iterations.

Broader Context

The discussion surrounding corporate blockchains highlights a critical juncture in Web3's evolution. While corporate adoption can normalize blockchain technology, the trade-offs between decentralization and corporate priorities such as compliance, efficiency, and control remain a central tension. The long-term success of blockchain, as articulated by proponents of decentralization, rests on its ability to empower users through self-custody and eliminate central intermediaries. The ongoing development of user experience (UX) in self-custody solutions is recognized as a crucial factor for achieving global mass adoption, a challenge that truly decentralized platforms are actively addressing.