Ethereum co-founder Vitalik Buterin has called for a rethink of decentralized autonomous organization (DAO) design, arguing that most DAOs remain stuck in a shallowEthereum co-founder Vitalik Buterin has called for a rethink of decentralized autonomous organization (DAO) design, arguing that most DAOs remain stuck in a shallow

Vitalik Buterin Pushes New DAO Models for Courts, Oracles, Governance

  • Vitalik stated that most DAOS resemble token voting treasuries and don’t do much in terms of preventing capture or inefficiency.
  • His hope for DAOs is to use the technology behind oracle services, on-chain courts, scam lists, and stewardship.
  • The addition of privacy tools and AI-based delegation can increase voters’ turnout, and yet the DAO governance framework requires a better design.

Ethereum co-founder Vitalik Buterin has called for a rethink of decentralized autonomous organization (DAO) design, arguing that most DAOs remain stuck in a shallow model that fails to fix the weaknesses of politics and corporate governance. In a Monday post on X, Buterin said today’s DAO blueprint often amounts to “a treasury controlled by token holder voting,” and the sector needs to move beyond that default.

Buterin warned that the standard treasury-and-token-vote structure has spread widely because it is simple to deploy. However, he said it delivers weak outcomes. It breeds inefficient decision-making, is liable to governance capture, and fails to deliver improved fairness or accountability. His perspective is that DAOs must migrate towards governance infrastructure rather than mere tokenized treasuries.

DAOs should power core infrastructure, not just treasuries

Buterin outlined a broader vision in which DAOs take responsibility for infrastructure that requires collective coordination and credible neutrality. He highlighted three major targets: better oracles, on-chain dispute resolution, and long-term project stewardship.

Oracles often decide what “truth” enters a blockchain system, which makes them central to DeFi, insurance, and settlement. On the other hand, the matter of dispute resolution is relevant whenever there is a need for subjective assessment in those agreements that happen on-chain, for instance, in insurance disputes, fraud cases, or in matters of the delivery of services. According to Buterin, DAOs can solve these challenges by proper design in their governance instead of relying solely on token votes for legitimacy.

He also pointed to governance use cases that demand continuous curation. DAOs could maintain shared lists such as anti-scam registries, build common formats for short-term funding vehicles, and preserve protocols after their original teams disappear. These functions matter for crypto’s long-term resilience, especially as many projects lose contributors after early hype cycles fade.

“Concave vs convex” governance offers a design framework

Buterin framed his argument around his earlier “convex vs concave” governance lens. He said different types of problems require different kinds of governance.

For concave problems, compromise is better than a coin flip. These decisions benefit from wide input, diverse views, and high robustness. In this case, DAOs should focus on aggregation mechanisms that pull signals from many participants while resisting manipulation.

For convex problems, a decisive bet can outperform slow consensus. Buterin said DAOs should allow strong leadership in these cases. Rather than attempting to supplant leadership through decentralization, DAOs can utilize the concept of decentralization to make leaders accountable.

This approach has implications because, in it, one-size-fits-all governance does not work. Buterin wants developers to consider the architecture of governance as something serious in the area of engineering.

Privacy and decision fatigue block DAO performance

Buterin also warned that DAOs will fail unless they solve two structural issues: privacy and participation fatigue.

Without privacy, governance turns into a social game. Participants vote based on status, influence, and pressure rather than honest preferences. Buterin pointed to zero-knowledge proofs as a core tool to protect voter privacy. He also mentioned secure multi-party computation and fully homomorphic encryption as possible approaches in some cases.

Decision fatigue creates another major failure mode. If DAOs require constant voting, turnout collapses after early enthusiasm. Buterin suggested that AI could help reduce fatigue by supporting analysis or enabling delegation to locally controlled models. However, he cautioned against allowing AI to run DAOs directly.

Next-gen DAOs must address whale capture

Buterin’s comments land as DAO ecosystems expand while still struggling with low turnout and token concentration. DAO tokens now hold a market capitalization of at least $17.5 billion, but many governance systems still rely on a narrow set of active voters.

Buterin argued that teams building new governance systems should treat DAO design and the communication layer around it as “50% of their job, not 10%,” especially if Ethereum’s decentralized base layer is meant to carry into the applications built above it.

Highlighted Crypto News:

Canaan Risks Nasdaq Delisting as Shares Slip Below $1 Again

Disclaimer: The articles reposted on this site are sourced from public platforms and are provided for informational purposes only. They do not necessarily reflect the views of MEXC. All rights remain with the original authors. If you believe any content infringes on third-party rights, please contact [email protected] for removal. MEXC makes no guarantees regarding the accuracy, completeness, or timeliness of the content and is not responsible for any actions taken based on the information provided. The content does not constitute financial, legal, or other professional advice, nor should it be considered a recommendation or endorsement by MEXC.

You May Also Like

WhiteWhale Meme Coin Crashes 60% in Minutes After Major Token Dump

WhiteWhale Meme Coin Crashes 60% in Minutes After Major Token Dump

The post WhiteWhale Meme Coin Crashes 60% in Minutes After Major Token Dump appeared on BitcoinEthereumNews.com. A Solana-based meme coin called WhiteWhale suffered
Share
BitcoinEthereumNews2026/01/20 19:33
Will Elon Musk buy this company next?

Will Elon Musk buy this company next?

The post Will Elon Musk buy this company next? appeared on BitcoinEthereumNews.com. Elon Musk’s latest exchange on X with a budget airline company had the appearance
Share
BitcoinEthereumNews2026/01/20 18:46
UK Looks to US to Adopt More Crypto-Friendly Approach

UK Looks to US to Adopt More Crypto-Friendly Approach

The post UK Looks to US to Adopt More Crypto-Friendly Approach appeared on BitcoinEthereumNews.com. The UK and US are reportedly preparing to deepen cooperation on digital assets, with Britain looking to copy the Trump administration’s crypto-friendly stance in a bid to boost innovation.  UK Chancellor Rachel Reeves and US Treasury Secretary Scott Bessent discussed on Tuesday how the two nations could strengthen their coordination on crypto, the Financial Times reported on Tuesday, citing people familiar with the matter.  The discussions also involved representatives from crypto companies, including Coinbase, Circle Internet Group and Ripple, with executives from the Bank of America, Barclays and Citi also attending, according to the report. The agreement was made “last-minute” after crypto advocacy groups urged the UK government on Thursday to adopt a more open stance toward the industry, claiming its cautious approach to the sector has left the country lagging in innovation and policy.  Source: Rachel Reeves Deal to include stablecoins, look to unlock adoption Any deal between the countries is likely to include stablecoins, the Financial Times reported, an area of crypto that US President Donald Trump made a policy priority and in which his family has significant business interests. The Financial Times reported on Monday that UK crypto advocacy groups also slammed the Bank of England’s proposal to limit individual stablecoin holdings to between 10,000 British pounds ($13,650) and 20,000 pounds ($27,300), claiming it would be difficult and expensive to implement. UK banks appear to have slowed adoption too, with around 40% of 2,000 recently surveyed crypto investors saying that their banks had either blocked or delayed a payment to a crypto provider.  Many of these actions have been linked to concerns over volatility, fraud and scams. The UK has made some progress on crypto regulation recently, proposing a framework in May that would see crypto exchanges, dealers, and agents treated similarly to traditional finance firms, with…
Share
BitcoinEthereumNews2025/09/18 02:21