Ethereum co‑founder Vitalik Buterin urged a fundamental redesign of decentralized autonomous organizations, arguing that many DAOs have devolved into mere “token‑vote‑controlled treasuries.”
Buterin warned this model produces low participation, plutocratic influence and weak mechanisms for subjective dispute resolution, and proposed a set of technical and institutional changes intended to restore DAOs’ practical utility for complex, real‑world coordination.
Buterin framed the problem as structural. Token‑weighted voting encourages voter fatigue and enables concentration of influence, he said, turning governance into a social game where reputation and public signalling distort outcomes. That dynamic, he argued, leaves DAOs ill‑equipped to adjudicate nuanced disputes that require judgement beyond binary on‑chain checks, such as insurance claims or contested protocol intentions.
He also highlighted two technical gaps that amplify governance failure: pervasive lack of privacy in decision processes, which fosters social pressure, and fragile oracle models that expose DAOs to manipulation when they must bridge on‑chain rules with off‑chain facts. Together, these deficiencies narrow DAO activity to treasury management and block broader infrastructure work.
Blueprint for “different and better” DAOs
Buterin outlined a multi‑pronged redesign that blends cryptography, economic incentives and curated decision workflows. He proposed decentralized truth‑finding and arbitration systems—mechanisms akin to Schelling‑point juries, reputation‑weighted jurors and specialist subcommittees—to handle subjective disputes with formal appeal paths.
He also recommended more active use of AI to reduce decision fatigue. Practical applications include automated summarization of proposals and discussion threads, risk flagging and delegated voting via locally controlled models that learn user preferences but remain subject to human override.
Beyond adjudication and privacy, Buterin called for treating communication layers as core infrastructure—integrating discussion, proposal drafting and vote records—and for DAOs to focus on infrastructure problems such as robust oracle design, maintenance of shared registries (anti‑scam lists, verified addresses) and prioritizing “concave” decisions where broad aggregation improves outcomes.
Buterin’s prescription is practical rather than ideological: design choices should match decision types. Aggregative, broadly robust questions benefit from wide participation; technical, high‑stakes responses require specialized, fast mechanisms with checks.
Investors, developers and governance designers will now watch early implementations and protocol updates closely. The success of these proposals will be measured by whether they reduce capture, raise sustained participation and allow DAOs to safely coordinate complex, real‑world functions.
