Vitalik Buterin calls for ‘different and better’ DAOs beyond token-holder voting

Ethereum co-founder Vitalik Buterin has urged the crypto community to develop more advanced and effective decentralized autonomous organizations (DAOs).

“We need more DAOs — but different and better DAOs,” Buterin posted to X on Monday. He emphasized that the original drive to build Ethereum was “heavily inspired” by DAOs — systems in which rules on decentralized networks manage resources and govern activity more efficiently than traditional governments and corporations.

While the dominant DAO model of today with treasuries controlled by token-holder voting is functional, Buterin said it is inefficient and fails to address the weaknesses of human politics. This has led many to become cynical about DAOs, he added.

He identified several critical areas where improved DAO designs are essential. One is the creation of better oracles to support decentralized finance.

“Today, decentralized stablecoins, prediction markets, and other basic building blocks of DeFi are built on oracle designs that we are not satisfied with,” said Buterin. “Fundamentally, a token-based oracle cannot have a cost of attack higher than its market cap, which in turn means it cannot secure assets without extracting rent higher than the discount rate.”

Other pressing use cases include onchain dispute resolution for advanced smart contract applications such as insurance; maintaining curated lists of secure applications, canonical interfaces, verified token addresses, and similar shared resources; quickly pooling funds from motivated contributors for short-term projects; and enabling long-term project maintenance after the departure of original members.

Privacy and decision fatigue

Buterin highlighted two core barriers blocking progress: privacy and decision fatigue.

“Without privacy, governance becomes a social game,” Buterin wrote. “And if people have to make decisions every week, for the first month you see excited participation, but over time willingness to participate, and even to stay informed, declines.”

Recent advances offer a path forward, the Ethereum co-founder suggested, pointing to zero-knowledge proofs for privacy and AI to reduce decision fatigue. Buterin noted that AI should not be adopted at full scale, but at a level that can enhance human intention and judgment.

Buterin’s post also highlighted the idea of incorporating a communication layer into DAOs — including forums and dedicated platforms — as part of the governance process.

“Projects that need new oracles and want to build their own should see that as 50% of their job, not 10%,” he wrote. Similarly, governance-focused projects should be designed with ZK and AI from the start and allocate major effort to the communication layer.

“This is how we can ensure the decentralization and robustness of the Ethereum base layer also applies to the world that gets built on top,” Buterin said.