Key Highlights
- Vitalik says most DAOs today are too simple and easy for big players to control.
- He feels improved DAOs are needed for oracles, dispute resolution, trusted lists, and helping projects start and keep running over time.
- Buterin also believes tools like zero-knowledge tech, AI, and better communication can make DAOs stronger and more effective.
Ethereum Co-Founder Vitalik Buterin has called for a rethink of how decentralized autonomous organizations (DAOs) are built, saying the ecosystem needs “more DAOs — but different and better DAOs.”
In a long post on X, Buterin said the original idea behind Ethereum was inspired by DAOs that could “manage resources and direct activity more efficiently and more robustly than traditional governments and corporations.”
Over the years, Buterin said, most DAOs have become very simple and are mainly shared wallets where people vote with their tokens. He said this system does work, but it is slow, easy for big players to control, and does not really fix the human and political problems that DAOs were meant to solve.
Because of this, many people have lost belief in DAOs. But Buterin says the idea itself is not the problem. The way they are built is. His solution? A radical pivot toward ZK-privacy, AI-assisted filtering, and “convex” governance models.
Where better DAOs are urgently needed
“We need DAOs,” Buterin wrote, stressing that better versions are essential for the future of Ethereum. He pointed to several areas where improved DAOs are urgently required, starting with oracles.
These systems provide critical data for DeFi, stablecoins, and prediction markets. Buterin warned that token-based oracles are easy for whales to manipulate and said, “fundamentally, a token-based oracle cannot have a cost of attack higher than its market cap.”
Buterin said DAOs have many important uses beyond treasury management. These include resolving on-chain disputes for advanced applications like insurance, maintaining shared resources such as lists of trusted apps, standard interfaces, and verified token addresses, and helping people quickly pool funds to start short-term projects.
He also said DAOs can support long-term project maintenance, allowing communities to keep projects running even after the original teams step away.
Privacy and burnout are major roadblocks
Buterin explained that governance systems should be designed differently depending on the kind of problem they are solving. Some situations benefit from broad participation and compromise, while others require strong leadership with accountability. He suggested current DAO models handle neither very well.
He further identified two major challenges that must be solved: privacy and burnout. “Without privacy, governance becomes a social game,” he wrote, warning that public voting can turn decision-making into popularity contests. He also said frequent voting leads to “decision fatigue,” where people slowly disengage and stop paying attention.
From participation to privacy
The most provocative part of Buterin’s thesis is the link between privacy and effective governance. He argues that without Zero-Knowledge (ZK) tools, voting is performative. He mentioned ZK tools for privacy, AI for easier participation, and communication platforms for reaching a consensus in a community.
But he agreed that AI should not operate the DAOs alone. AI will help and enhance human decision-making rather than replace it, according to him. He concluded by urging builders to treat governance, privacy, and communication as core parts of their products, not side features.
In his words, projects should see DAO design and communication tools as “50% of their job, not 10%.” Only then, he argued, can the decentralization of Ethereum truly extend to the systems built on top of it.
Also Read: Vitalik Calls for “Garbage Collection” to Prevent Ethereum Bloat
