Vitalik Buterin Calls For Major DAO Governance Overhaul

Ethereum co-founder Vitalik Buterin has emphasized the need for an overhaul of decentralized autonomous organizations, or DAOs. He argued that many have failed to fulfill their promise of shifting financial power from traditional banks to everyday token holders.

Currents DAO Structures Face Manipulation Risks

DAOs, in their current form, rely heavily on token-based voting, a system that Buterin says has become too easy to manipulate. He noted that these systems often replicate the same political and coordination problems they were meant to solve. 

In practice, this design allows a few powerful actors to capture influence, leaving smaller token holders with little real power. Buterin pointed out that while token-based governance is widely adopted, it is inefficient and vulnerable to exploitation. 

Meanwhile, many participants in DAOs have become “cynical” as a result, losing confidence in the ability of these organizations to deliver meaningful decentralized governance.

The Ethereum co-founder also highlighted the importance of balancing decisiveness and resilience in DAOs. Certain decisions, such as strategic launches or shutdowns, require clear, strong leadership, something current DAO frameworks struggle to provide. 

By contrast, other tasks like evaluating contract safety or pricing tokens benefit from a wider consensus, where the wisdom of the crowd can produce better outcomes.

Need for Sophisticated DAO Functions

Buterin argued that DAOs must evolve to support critical functions in the crypto ecosystem. These include maintaining shared data, resolving disputes, and sustaining long-term projects. He stressed that governance systems must be robust enough to resist capture, financial attacks, and participant fatigue. 

Privacy in decision-making remains a key obstacle, as frequent public voting can discourage engagement from smaller token holders.

In addition to the aforementioned, Vitalik Buterin recently urged the crypto industry to focus on building tools that protect personal freedom, not risky finance. 

Convex and Concave Decision-Making Explained

To clarify his vision, Buterin referenced his framework of convex and concave decisions. Convex decisions demand clear choices and strong leadership, whereas concave decisions benefit from averaging inputs across many participants. 

Notably, properly applied, this approach can strengthen DAO governance and ensure that decentralization adds value without creating gridlock. 

Buterin’s call underlines the need for more resilient, fair, and functional DAOs that can genuinely deliver on the promise of decentralized finance.

Meanwhile, last year, MetaMask, used by over 100 million people, partnered with TRON DAO to simplify Web3 access, allowing users to connect directly to the TRON network.