Ethereum co-founder Vitalik Buterin has called for a rethink of decentralised autonomous organisation designs to better handle governance and onchain disputes.
In a post on X, Buterin said many DAOs have become little more than “a treasury controlled by token holder voting.”
He argued that the model is inefficient, vulnerable to capture and fails to address the weaknesses of traditional political and corporate systems.
Buterin said DAOs should instead focus on solving concrete infrastructure problems such as oracles, onchain courts and long-term project stewardship.
He highlighted potential roles for DAOs in managing subjective disputes, maintaining shared anti-scam registries and supporting projects after founding teams leave.
Using his “convex versus concave” governance framework, Buterin said different problems require different DAO structures.
He said concave problems benefit from broad input and compromise, while convex problems require strong leadership with decentralised accountability.
Buterin warned that privacy and decision fatigue remain major challenges for DAO governance.
He said a lack of privacy turns governance into a social game and frequent voting reduces long-term participation.
Technologies such as zero-knowledge proofs and secure multi-party computation were cited as tools to improve governance privacy.
Buterin added that artificial intelligence could help reduce decision fatigue, while cautioning against DAOs being fully run by AI.
His comments come as DAO ecosystems grow in value but continue to struggle with low voter turnout and concentrated power.
At the time of reporting, Ethereum price was $3,183.52.