Ethereum founder Vitalik Buterin has offered noteworthy criticisms of the current functioning of decentralized autonomous organizations (DAOs) in the crypto ecosystem. In his article, Buterin argues that many current DAOs have strayed from their original vision and that “different and better DAO designs” need to be rethought and rebuilt.
The Evolution and Shortcomings of DAO Structures
Buterin, recalling that the DAO concept emerged in Ethereum’s early days with a strong inspiration for decentralization, stated that many structures today have been reduced to “a treasury managed by token voting.” While acknowledging that this model may be technically functional, Buterin emphasized that it is inefficient, susceptible to manipulation, and inadequate in addressing the fundamental problems created by human politics.
Critical Infrastructure Roles and Governance Challenges
According to the renowned developer, DAOs still play a critical infrastructure role in areas such as improving oracle design, resolving on-chain disputes, managing keylists, rapidly initiating short-term collaborations, and sustaining long-term projects after founding teams depart. He stated that the problem stems from shortcomings in governance and system design, including the oracle, rather than a lack of participatory motivation.
Proposed Governance Framework: Concave and Convex Problems
Buterin proposed a “concave and convex problems” approach for the governance framework, stating that each problem requires a different governance structure. In situations where consensus and resilience are important, broad participation and resistance to manipulation should be prioritized; in scenarios requiring quick and clear decisions, leadership should take center stage, while decentralized mechanisms should remain in place to maintain balance.
Addressing Privacy and Decision Fatigue with Advanced Technologies
Buterin also stated that privacy and decision fatigue issues need to be resolved for DAOs to be truly functional, and that zero-knowledge proofs (ZK), multi-party computation, artificial intelligence, and consensus-based communication tools can be used in this process. He particularly emphasized that artificial intelligence should not replace human decisions, but rather be a tool to support them.
Core Components for Future DAO Designs
Finally, Buterin stated that in future DAO designs, governance mechanisms, privacy technologies, and communication layers should be treated as core components, not auxiliary modules, so that Ethereum’s decentralization at the lower layers can be preserved in upper-layer applications as well.