Ethereum co-founder Vitalik Buterin has reignited debate around decentralized autonomous organizations by arguing that the ecosystem needs more DAOs, but with entirelyEthereum co-founder Vitalik Buterin has reignited debate around decentralized autonomous organizations by arguing that the ecosystem needs more DAOs, but with entirely

Ethereum’s DAO Model Faces Growing Failure as Buterin Pushes Bold New Vision

3 min read

Ethereum co-founder Vitalik Buterin has reignited debate around decentralized autonomous organizations by arguing that the ecosystem needs more DAOs, but with entirely new designs. 

He argues that early DAOs aimed to manage resources better than states or companies, but over time, they turned into simple token-voting systems focused on treasuries. While easy to copy, he says this model fails to address real governance and political challenges.

He points out that token voting is often inefficient and exposed to capture. Large holders can sway outcomes, especially in subjective decisions, and smaller participants lose faith. 

This shift has led to growing cynicism around DAOs, even though Buterin argues they remain essential to Ethereum’s future.

Also Read: Ethereum (ETH) Price Analysis: $3,400 Upside vs $3,000 Support

Why Ethereum Still Needs DAOs

Buterin says that most oracles that are related to DAOs are weak. Oracles that rely on tokens can be hacked, and the fact that they are operated by human beings is a problem that leads to a lack of decentralization.

He also highlights that the dispute resolution on-chain is a weakness. Smart contracts, especially complex ones such as insurance, require systems that can evaluate the subjective outcome. These are harder than price feeds and need new DAO designs that ensure fairness while preventing cheating.

In addition to this, DAOs have to maintain trusted lists throughout the ecosystem. These lists comprise trusted apps, known scams, standard interfaces, and verified contract addresses. Without this, users are at a higher risk of fragmentation.

DAOs assist with fast teamwork in the current situation and survival in the future. If a group of people wants to begin a small project, creating a legal entity is not necessary in most cases. A DAO can finance and manage the project quickly. However, if the project creators abandon the project, a DAO can sustain the project and compensate contributors.

Privacy, AI, and the Next DAO Model

Buterin describes governance issues related to concave and convex problems. Some problems are better solved by compromise and averaging, while others require leadership and rapid decision-making. A good DAO has to solve both types without falling apart.

Two large issues are in the way: privacy and decision fatigue. Without privacy, governance will be a social game that is full of pressure and signaling. Without a limit on participation, voters will be tired and won’t pay attention.

Buterin believes that modern technology can solve this issue. Zero-knowledge technology can solve the privacy issue, and AI can solve the decision fatigue issue by assisting people in processing information and stating what they mean.

He says AI should not replace humans. Rather, AI should assist with decision-making, either on a DAO level or for individuals who make normal decisions. Communication is also important.

Good communication platforms, such as consensus platforms together with multisig systems, can perform better than sophisticated funding systems fueled by social media buzz.

Also Read: Ethereum’s Surge in Activity: A Sign of Growth or Address Poisoning Attacks in 2026?

Disclaimer: The articles reposted on this site are sourced from public platforms and are provided for informational purposes only. They do not necessarily reflect the views of MEXC. All rights remain with the original authors. If you believe any content infringes on third-party rights, please contact service@support.mexc.com for removal. MEXC makes no guarantees regarding the accuracy, completeness, or timeliness of the content and is not responsible for any actions taken based on the information provided. The content does not constitute financial, legal, or other professional advice, nor should it be considered a recommendation or endorsement by MEXC.

You May Also Like

Trump swears he'll donate winnings in $10 billion lawsuit against his own IRS

Trump swears he'll donate winnings in $10 billion lawsuit against his own IRS

President Donald Trump told NBC News' Tom Llamas in an interview released on Wednesday that he has no interest in actually keeping any money he wins from his lawsuit
Share
Rawstory2026/02/05 10:43
US President Donald Trump says Warsh would’ve lost Fed if he pledged rate hike

US President Donald Trump says Warsh would’ve lost Fed if he pledged rate hike

The post US President Donald Trump says Warsh would’ve lost Fed if he pledged rate hike appeared on BitcoinEthereumNews.com. US President Donald Trump said that
Share
BitcoinEthereumNews2026/02/05 10:23
Taiko Makes Chainlink Data Streams Its Official Oracle

Taiko Makes Chainlink Data Streams Its Official Oracle

The post Taiko Makes Chainlink Data Streams Its Official Oracle appeared on BitcoinEthereumNews.com. Key Notes Taiko has officially integrated Chainlink Data Streams for its Layer 2 network. The integration provides developers with high-speed market data to build advanced DeFi applications. The move aims to improve security and attract institutional adoption by using Chainlink’s established infrastructure. Taiko, an Ethereum-based ETH $4 514 24h volatility: 0.4% Market cap: $545.57 B Vol. 24h: $28.23 B Layer 2 rollup, has announced the integration of Chainlink LINK $23.26 24h volatility: 1.7% Market cap: $15.75 B Vol. 24h: $787.15 M Data Streams. The development comes as the underlying Ethereum network continues to see significant on-chain activity, including large sales from ETH whales. The partnership establishes Chainlink as the official oracle infrastructure for the network. It is designed to provide developers on the Taiko platform with reliable and high-speed market data, essential for building a wide range of decentralized finance (DeFi) applications, from complex derivatives platforms to more niche projects involving unique token governance models. According to the project’s official announcement on Sept. 17, the integration enables the creation of more advanced on-chain products that require high-quality, tamper-proof data to function securely. Taiko operates as a “based rollup,” which means it leverages Ethereum validators for transaction sequencing for strong decentralization. Boosting DeFi and Institutional Interest Oracles are fundamental services in the blockchain industry. They act as secure bridges that feed external, off-chain information to on-chain smart contracts. DeFi protocols, in particular, rely on oracles for accurate, real-time price feeds. Taiko leadership stated that using Chainlink’s infrastructure aligns with its goals. The team hopes the partnership will help attract institutional crypto investment and support the development of real-world applications, a goal that aligns with Chainlink’s broader mission to bring global data on-chain. Integrating real-world economic information is part of a broader industry trend. Just last week, Chainlink partnered with the Sei…
Share
BitcoinEthereumNews2025/09/18 03:34