Vitalik Buterin wants ‘new designs’ of DAOs
Ethereum founder Vitalik Buterin has called for new decentralized autonomous organizations (DAOs) designs, arguing that the sector needs more than token-voting treasuries if it wants to evolve over traditional corporate and political structures.
In Monday's X post, Buterin said that current DAOs are often “treasury controlled by token holder voting.”
That model has been widely replicated, he says, but is “inefficient, prone to capture, and completely unsuccessful in its goal of alleviating the weaknesses of human politics.”
Buterin argues that DAOs need to address certain infrastructure issues, starting with better terms, onchain dispute resolution, and long-term project management.
Also, the importance of DAOs to personal disputes (such as insurance effects), to drive short-term funding vehicles, and to maintain projects after the disappearance of core groups, lay down common details such as anti-fraud registers and standard formats.
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Concave vs convex: different DAOs for different problems
Buterin framed his thinking using his earlier management lens of “convex vs concave”. For “concave” problems, where consensus is “better than flipping a coin,” DAOs must increase robustness by pooling input from multiple sources.
For “convex” problems that require critical bets, he says, it's more appropriate to allow strong leadership rather than full replacement, and decentralization to hold leaders accountable.
For such systems to work in practice, DAOs must address privacy issues and “decision fatigue,” Buterin said.
Without privacy, governance becomes a “social game,” and if participants are constantly asked to vote, engagement will fizzle out after the initial enthusiasm. He suggested zero-knowledge proofs and, in some cases, secure multi-party computation and fully asynchronous encryption to preserve privacy.
He also pointed out that artificial intelligence could help reduce decision fatigue by supporting analysis or allowing users to vote, while on the other hand, he warned against DAOs being driven by AI.
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Low engagement, whale capture and the case for next-generation DAOs
Buterin's post comes as DAO ecosystems continue to grow but struggle with engagement and focus.
According to CoinMarketCap, DAO tokens have a capitalization of at least $17.5 billion.
While mature DAOs like Aave DAO and Optimism Collective use onchain governance to manage core decentralized finance (DeFi) protocols and support public goods, Buterin argues that projects designing new idioms or governance systems see DAO design and the surrounding communication layer as “50% of their work, not 10%.”
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