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Market News

Vitalik Buterin Proposes Two-Layer Governance Model for DAOs

Vitalik says DAOs need accountability and diversity, backing prediction markets and anonymous voting to counter token dominance in future governance models.

Written By Kenrodgers Fabian
Fact Checked by Dhara Chavda
Published 2026-02-02
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Vitalik Buterin Proposes Two-Layer Governance Model for DAOs

Key Highlights

  • Vitalik proposes a two-layer governance model that separates accountability from voting, aiming to fix DAO capture by large token holders.
  • He argues prediction markets improve decision accountability, while anonymous voting protects diversity, privacy, and intrinsic community motivation.
  • The push aligns with Ethereum’s privacy-first roadmap, signaling a shift toward smarter, more resilient DAOs beyond token voting.

Ethereum co-founder Vitalik Buterin is pushing a radical shift in on-chain governance that could redefine decentralized decision-making. In a detailed post on X, he outlined a two-layer approach designed to combine accountability with pluralistic preference-setting. 

Vitalik was replying to an X post by MilliΞ who said Vitalik’s creator platform idea may look complex, but it points in the right direction. He argued that social platforms favor popularity over quality, creating an opportunity for alternative systems that reward meaningful content creation instead.

I actually don't think it's complicated.

IMO the future of onchain mechanism design is mostly going to fit into one pattern:

[something that looks like a prediction market] -> [something that looks like a capture-resistant, non-financialized preference-setting gadget]

In other… https://t.co/VutSyEI8Fd

— vitalik.eth (@VitalikButerin) February 2, 2026

According to Buterin, current DAO setups don’t really solve political or social coordination issues and often let big token holders call the shots. His idea is a two-layer system: one layer works like a prediction market to keep people accountable, while the second layer protects different opinions and personal motivation.

He suggests that the first layer needs to be fully open, where everyone is allowed to join, winning or losing money based on their decisions. This ensures that the system is transparent and accountable. For the second layer, diversity and anonymity are important, reducing the influence of token holders and the risks of collusion.

“Votes here should be anonymous, ideally MACI’d to reduce risk of collusion,” he wrote. He emphasized that this system separates execution from preference-setting, creating a clearer, more resilient governance structure.

Rethinking DAOs

Buterin’s post comes at a time when many people are frustrated with token-based DAOs. However, nowadays most of these DAOs behave like a shared wallet in which a few large holders are in control. Therefore, they do not really live up to the original concept of a DAO. This concept is about collective decision-making for better resource management.

He said, “We need DAOs,” stressing that improved versions are essential for Ethereum’s future. Buterin believes new DAOs should focus on practical tools like oracles, dispute resolution, and managing shared resources, instead of relying on broad token-based voting.

Oracles, for instance, give important real-world data to DeFi apps, stablecoins, and prediction markets. Buterin warned, “Fundamentally, a token-based oracle cannot have a cost of attack higher than its market cap.” He also pointed out that DAOs can help keep long-term projects running, even after the original teams move on. Moreover, DAOs could make it easier to fund short-term projects quickly and help resolve disputes in complex areas like insurance.

Also Read: DAOs Wanted to Kill Corporations—Now They’re Killing Themselves

Privacy, security, and long-term goals

Buterin’s ideas fit with his bigger focus on privacy and giving users more control. He recently withdrew 16,384 ETH to support secure and verifiable technology, emphasizing that Ethereum should put people first instead of chasing corporate-style growth. “Ethereum everywhere is nice, but the primary priority is Ethereum for people who need it,” he wrote. He also urges developers to concentrate on privacy, resisting censorship, and keeping systems open, rather than chasing quick growth.

Ethereum has also made significant technical advancements in 2025, such as zkEVMs and PeerDAS, making it faster and more efficient. According to Buterin, this has paved the way for more intelligent systems of governance. Zero-knowledge principles, with artificial intelligence-based filters and convex models of governance, will result in stronger and more inclusive DAOs.

Industry comparisons

Some industry observers, like SasuRobert, note similarities between Buterin’s proposals and MultiversX’s existing architecture. Multi-layer staking, adaptive sharding, and distributed validators already implement features like secure randomness and near-instant finality. 

When reading this, I am quite happy. Most of the proposals from Vitalik’s post is similar if not exactly the same as we have already implemented on the #MultiversX chain.

Multi-layer staking/delegation is built directly on-chain. Distributed Validators do exist, built by… https://t.co/GYgO5et9X8

— Robert Sasu | dev/acc (@SasuRobert) December 29, 2023

SasuRobert said, “Now, when you see adaptive sharding, increasing/growing validators as the demand increases, it means everyone will have a place to stake/delegate/validate.” This suggests Ethereum’s future governance model could align with existing innovations in other chains.

Also Read: Latest Crypto Crash is Liquidity Squeeze, Not Fundamentals: Raoul Pal

Disclaimer: The information researched and reported by The Crypto Times is for informational purposes only and is not a substitute for professional financial advice. Investing in crypto assets involves significant risk due to market volatility. Always Do Your Own Research (DYOR) and consult with a qualified Financial Advisor before making any investment decisions.

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TAGGED:DAOVitalik Buterin
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