There is a third way: Private adjudication. I see no reason why the crypto community couldn't run its own private court system, similar to what e.g. Randy Barnett describes in chapter 5 of Anarchy and the Law.

(Obligatory, I don't work in crypto or have any special connection to it, I just think people forget this third option even exists when it's really the most common way most private industries actually resolve disputes most of the time.)