Ethereum co-founder Vitalik Buterin has urged the crypto community to develop more advanced and efficient DAOs.
We need more DAOs — but different and better DAOs.
The original drive to build Ethereum was heavily inspired by decentralized autonomous organizations: systems of code and rules that lived on decentralized networks that could manage resources and direct activity, more…
— vitalik.eth (@VitalikButerin) January 19, 2026
“The impetus to create Ethereum was heavily inspired by decentralized autonomous organizations: systems of code and rules existing on decentralized networks that could manage resources and direct activity more efficiently and sustainably. […] Since then, the concept of DAOs has essentially been reduced to a treasury,” he wrote.
The programmer described the dominant token-based governance model as unproductive and weak.
According to him, the current design works but is unproductive, vulnerable to capture, and “completely fails to mitigate the shortcomings of human politics.” Buterin sees this as the reason for the community’s skepticism towards the DAO concept.
What Should Be Done?
The Ethereum co-founder highlighted several key areas requiring progress in DAO architecture. One of these is the creation of more advanced oracles to support decentralized finance.
“Today, key elements of DeFi — stablecoins, prediction markets, and others — rely on vulnerable oracle models. The main issue is that an attack on a tokenized oracle can never cost more than its market capitalization. This means that to ensure security, it is forced to extract excessive rent exceeding the risk-free rate,” he noted.
Among other important directions, Buterin identified:
- arbitration for complex smart contracts: creating on-chain dispute resolution systems necessary for advanced applications (e.g., decentralized insurance);
- curation of critical data: maintaining up-to-date and reliable registries — from lists of verified and safe applications to standard interfaces and token addresses;
- rapid initiative deployment: tools for quickly mobilizing resources and funds from the interested community for specific, often short-term tasks;
- project sustainability: mechanisms allowing the community to take on long-term support and development of projects after the initial team departs.
Buterin considers the main barriers to the “normal” functioning of decentralized autonomous organizations to be the lack of privacy and “decision fatigue.”
“Without privacy, governance becomes a social game. And if people have to make decisions every week, you see active participation in the first month, but over time the willingness to participate and even stay informed decreases,” he emphasized.
As a solution, the programmer suggested using ZK-proofs and artificial intelligence. However, he approaches AI cautiously: in his view, the technology should enhance rather than replace human judgment.
Buterin also pointed out the importance of the communication component of DAOs. He believes that forums and discussion platforms need to be more deeply integrated into governance mechanisms.
“Only then can we ensure that the decentralization and sustainability of Ethereum’s foundational layer extend to the world being built on top of it,” he concluded.
Earlier, Vitalik Buterin stated that by 2026 the project would regain its lost standing in matters of self-governance and trustlessness.