{"id":2262,"date":"2026-01-19T11:26:08","date_gmt":"2026-01-19T16:26:08","guid":{"rendered":"https:\/\/www.decentralnetwork.org\/news\/?p=2262"},"modified":"2026-01-19T11:26:12","modified_gmt":"2026-01-19T16:26:12","slug":"ethereum-8","status":"publish","type":"post","link":"https:\/\/www.decentralnetwork.org\/news\/ethereum-8\/","title":{"rendered":"Vitalik Says Token Voting Failed \u2014 Ethereum DAOs Need a Rethink"},"content":{"rendered":"\n
\"Vitalik<\/figure>\n\n\n\n

Ethereum co-founder Vitalik Buterin is calling for a major rethink of how decentralized autonomous organizations (DAOs) work, warning that today\u2019s popular token-voting model has drifted far from Ethereum\u2019s original vision of decentralized governance.<\/h2>\n\n\n\n

In a recent statement, Buterin argued that while Ethereum needs more<\/em> DAOs, it also needs better<\/em> ones. According to him, most current DAOs have effectively become token-controlled treasuries, where decisions are made mainly by whoever holds the most tokens. This setup, he says, is not only inefficient but also makes DAOs vulnerable to \u201cwhales\u201d \u2014 large token holders who can dominate outcomes.<\/p>\n\n\n\n

From vision to reality: what went wrong?<\/h3>\n\n\n\n

When Ethereum was first being developed, DAOs were imagined as code-driven organizations running on decentralized networks. These systems were supposed to manage funds and make decisions automatically and fairly, without relying on centralized control.<\/p>\n\n\n\n

But in practice, many DAOs now depend heavily on token-holder voting. While this model looks democratic on paper, Buterin believes it has created new problems, including governance capture, low participation, and decisions driven more by popularity than by what\u2019s best for the protocol.<\/p>\n\n\n\n

This has led many in the crypto community to question whether current DAO governance is really working as intended.<\/p>\n\n\n\n

Where DAOs are still needed<\/h3>\n\n\n\n

Despite the criticism, Buterin made it clear that collective decision-making is still essential in several parts of the decentralized finance (DeFi) world.<\/p>\n\n\n\n

One major area is oracles<\/a><\/strong>, which feed real-world data into blockchains. Oracles are critical for stablecoins, prediction markets, and many DeFi applications. However, Buterin pointed out that token-based oracle systems are vulnerable \u2014 especially when large token holders can sway outcomes on subjective questions. Even worse, the cost of attacking such systems is often limited by their market value, making it hard to secure large sums without charging high fees.<\/p>\n\n\n\n

Human-curated oracles reduce some of these risks, but they also compromise decentralization, creating another tough trade-off.<\/p>\n\n\n\n

Another challenge lies in on-chain dispute resolution<\/strong>, particularly for complex smart contracts like insurance products that require human judgment. DAOs are also used to maintain shared \u201csafe lists\u201d of trusted apps and verified contracts \u2014 something that can easily become fragmented without proper coordination.<\/p>\n\n\n\n

Five key use cases for better DAOs<\/h3>\n\n\n\n

Buterin outlined five core areas where improved DAO systems are most needed:<\/p>\n\n\n\n

    \n
  1. Stronger oracle systems for stablecoins and prediction markets<\/li>\n\n\n\n
  2. On-chain dispute resolution for complex smart contracts<\/li>\n\n\n\n
  3. Shared lists to protect users from fraudulent apps<\/li>\n\n\n\n
  4. Rapid coordination for short-term, community-funded projects<\/li>\n\n\n\n
  5. Long-term maintenance when original teams step away<\/li>\n<\/ol>\n\n\n\n

    A new framework: convex vs concave<\/h3>\n\n\n\n

    To help design better DAOs, Buterin introduced a \u201cconvex versus concave\u201d framework.<\/p>\n\n\n\n