Ethereum co-founder Vitalik Buterin is advocating for a redesign of Decentralized Autonomous Organizations (DAOs), emphasizing the need to move beyond the prevalent model of token-controlled treasuries. In a recent statement, Buterin argued that the current DAO structures are often inefficient, vulnerable to manipulation, and fail to address the fundamental weaknesses of traditional corporate and political systems. He envisions DAOs as critical infrastructure that should solve specific problems, particularly in on-chain dispute resolution, improved oracle design, and long-term project stewardship.

Buterin highlighted several key areas where improved DAO designs are essential. These include the creation of better oracles to support decentralized finance (DeFi), enabling on-chain dispute arbitration for applications like insurance, and maintaining curated lists of secure applications and verified token addresses. He also emphasized the role of DAOs in facilitating the rapid launch of short-term projects and ensuring the long-term maintenance of projects after the original teams have departed.

To achieve this, Buterin introduced the analytical perspective of "concavity and convexity issues," suggesting that different types of problems require different governance structures. For "concave" problems, where compromise is beneficial, DAOs should prioritize broad participation and resistance to manipulation. Conversely, for "convex" problems requiring decisive action, strong leadership should be permitted but balanced by decentralization mechanisms.

Buterin also addressed the critical challenges of privacy and decision fatigue that DAOs face. He noted that without privacy, governance can devolve into a social game, and constant voting can lead to decreased engagement. To mitigate these issues, Buterin suggested leveraging privacy technologies like zero-knowledge proofs (ZK) and multi-party computation. He also proposed that artificial intelligence (AI) could help reduce decision fatigue by amplifying and assisting human intent, rather than replacing human judgment.

Buterin stressed that future DAO designs should treat governance mechanisms, privacy technologies, and communication layers as core components, rather than auxiliary modules. He also highlighted the importance of incorporating communication layers into DAOs, including forums and dedicated platforms, as part of the governance process. He urged projects to focus on oracles, governance, and communication layers to ensure the decentralization and robustness of Ethereum's underlying layer are maintained in its upper-layer applications.

Buterin's call for improved DAO designs reflects a broader concern that the current token-based governance model is inefficient, easily manipulated, and fails to address the weaknesses of human politics. By rethinking and reconstructing DAOs, Buterin believes the crypto industry can create more effective and secure decentralized systems that fully leverage the potential of decentralized governance.