Ethereum co-founder Vitalik Buterin has urged the crypto industry to rethink how decentralized autonomous organizations (DAOs) are designed. He warned that many current implementations had moved away from the original version of DAOs. According to a post made by Vitalik on X.com, Buterin argued that DAOs have largely been reduced to “token-vote controlled treasuries.”
He described the current DAOs as an inefficient model that is easy to manipulate and overly reliant on traditional political dynamics. Buterin said Ethereum itself was initially inspired by the idea of DAOs as a new form of coordination, but that today’s designs often fail to solve the governance problems they were meant to address.
Vitalik Emphasized the Importance of DAOs
Vitalik emphasized that DAOs remain a critical infrastructure, with potential roles in oracle systems, on-chain dispute resolution, maintaining important lists, launching short-term collaborative initiatives, and sustaining long-term projects after founding teams step away. According to him, the core issue lies not in participant incentives but in flawed governance and oracle system design.
He introduced the concept of “concavity and convexity” in governance, arguing that different challenges require different structures balanced by decentralization safeguards. Buterin also highlighted privacy and decision fatigue as major hurdles. He suggested tools such as zero-knowledge proofs, multi-party computation, and AI-assisted communication to reduce governance issues. He stressed that AI should support, not replace, human judgment.
He believes the future DAOs must treat governance, privacy, and communication layers as core components to preserve Ethereum’s decentralized ethos.
