Ethereum co-founder Vitalik Buterin has urged the crypto community to develop more advanced and effective 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 strongly inspired by decentralized autonomous organizations: systems of code and rules existing on decentralized networks that could manage resources and direct activities more efficiently and sustainably. […] Since then, the concept of DAOs has essentially been reduced to treasury management,” he wrote.

Buterin criticized the dominant token-based governance model as unproductive and weak.

He stated that while the current design functions, it is ineffective, vulnerable to takeover, and “completely fails to mitigate the flaws of human governance.” This, he believes, has led to the community's skepticism towards the DAO concept.

What to Do?

The Ethereum co-founder highlighted several key areas that require progress in DAO architecture. One of these is the development of more sophisticated 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 has to extract excessive rents above the risk-free rate,” he noted.

Among other important areas, 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 vetted and secure applications to standard interfaces and token addresses;
  • rapid initiation of initiatives: tools for quickly mobilizing resources and funds from the interested community for specific, often short-term tasks;
  • project sustainability: mechanisms that allow the community to take on long-term support and development of projects after the original team departs.

Buterin sees the lack of privacy and “decision fatigue” as major barriers to the effective functioning of decentralized autonomous organizations.

“Without privacy, governance becomes a social game. If people have to make decisions every week, you see active participation in the first month, but over time, the willingness to engage and even stay informed declines,” he emphasized.

As a solution, the programmer suggested using ZK proofs and artificial intelligence. However, he approaches AI cautiously, believing that technology should enhance rather than replace human judgment.

Buterin also pointed out the importance of communication within DAOs. He believes that forums and discussion platforms need to be more deeply integrated into governance mechanisms.

“Only in this way can we ensure that the decentralization and resilience of the Ethereum base layer extend to the world built on top of it,” he concluded.

Recall that Vitalik Buterin stated that in 2026, the project will regain lost ground on issues of self-governance and trust.