Ethereum co-founder Vitalik Buterin urged the crypto community to develop more advanced and effective decentralized autonomous organizations (DAOs).
According to him, the push to create Ethereum was heavily inspired by the idea of DAOs — systems of code and rules living in decentralized networks that could manage resources and coordinate activity more efficiently and sustainably. Over time, however, Buterin says the concept of a DAO has “effectively been reduced to a treasury.”
He described the dominant token-based governance model as weak and unproductive. In his view, today’s design does function, but it remains inefficient, vulnerable to capture, and “completely fails at mitigating the flaws of human politics.” Buterin believes this is a key reason why parts of the community have grown skeptical of the DAO concept.
What should be done?
Buterin outlined several key areas where DAO architecture needs meaningful progress. One major focus is building stronger oracles to support decentralized finance.
He noted that core DeFi building blocks — stablecoins, prediction markets, and others — often rely on fragile oracle models. The core issue, he explained, is that attacking a tokenized oracle can never cost more than its market capitalization. As a result, to remain secure, such an oracle is forced to extract an excessive rent that exceeds the risk-free rate.
Other areas Buterin highlighted
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Arbitration for complex smart contracts:
creating on-chain dispute resolution systems required for advanced applications (for example, decentralized insurance). -
Curation of critical data:
maintaining up-to-date and reliable registries — from lists of vetted and safe applications to standard interfaces and token addresses. -
Rapid launch of initiatives:
tools for quickly mobilizing resources and funding from an interested community for specific, often short-term tasks. -
Project sustainability:
mechanisms that enable a community to provide long-term support and development after the original team steps away.
Main barriers: privacy and “decision fatigue”
Buterin considers the biggest obstacles to “normal” DAO operation to be a lack of privacy and decision fatigue.
He explained that without confidentiality, governance turns into a social game. And if people must make decisions every week, participation may be high in the first month, but over time the willingness to engage — or even stay informed — declines.
As potential solutions, he suggested using ZK proofs and artificial intelligence. However, he is cautious about AI: in his view, it should not rеplace human judgment, but augment it.
Communication as part of governance
Buterin also emphasized the importance of DAOs’ communication layer. He believes forums and discussion platforms need to be more deeply integrated into governance mechanisms.
Only then, he argued, can decentralization and sustainability at Ethereum’s base layer be extended to the ecosystem being built on top of it.
Reminder: previously, Vitalik Buterin said that in 2026 the project aims to regain lost ground in self-governance and a trustless approach (minimizing reliance on trust).