Vitalik Buterin calls for redesign of DAO governance

Ethereum founder Vitalik Buterin expresses deep concerns about the current development of decentralized autonomous organizations (DAOs) in the crypto industry. According to reports from ChainCatcher, Buterin criticizes that the original vision of DAOs is far removed from today’s practices. His central thesis: the industry must fundamentally rethink DAO designs and develop innovative governance models.

The current DAO reality: From vision to token-controlled control

Buterin acknowledges that Ethereum was originally heavily inspired by DAO concepts. However, according to his analysis, DAOs have evolved into mere token-based voting mechanisms for vaults. The core problem: these systems may operate effectively, but are structurally inefficient, easily manipulable, and incapable of managing human power struggles in governance processes. Reducing DAOs to simple token voting systems ignores their deeper significance as infrastructure for decentralized decision-making.

Governance structures for different DAO requirements

Buterin introduces an innovative analytical concept: the distinction between convexity and concavity problems in governance. His key insight is that different scenarios require different governance structures. For decisions requiring consensus and robustness, DAOs should focus on broad participation and manipulation resistance. Conversely, quick, critical actions need governance that enables balanced leadership through decentralized mechanisms. With this, Buterin addresses the fundamentally false understanding that all DAOs can operate under the same scheme.

At the same time, the Ethereum pioneer emphasizes that the real problem does not lie in participants’ motivations but in the deficiencies of governance and oracle system designs. DAOs remain an indispensable infrastructure for applications such as oracle improvements, on-chain dispute resolution, management of critical lists, rapid community projects, and long-term project maintenance after the original teams have exited.

Privacy and AI as solutions to DAO challenges

To make DAOs truly functional, two central challenges must be addressed: privacy and decision fatigue. Buterin proposes concrete technological solutions. Zero-Knowledge Proofs (ZK) and multiparty computations enable privacy-preserving governance processes. At the same time, AI tools and consensus-oriented communication platforms can reduce governance burdens. However, Buterin warns against misusing AI as a replacement for human judgment—AI should serve as a tool that amplifies human intentions, not replaces them.

The future DAO infrastructure: integration instead of addition

Buterin’s final message targets a fundamental reorganization of future DAO designs. Governance mechanisms, privacy technologies, and communication layers must not be treated as add-on modules. They need to be integrated as core components to ensure that the decentralization and robustness of Ethereum are preserved at all levels—from the foundational infrastructure to higher-level applications. This holistic perspective could define the next generation of DAOs and significantly improve their practical functionality.