Vitalik Buterin’s Opinion on DAOs, and Other Hot Takes

Vitalik Buterin, the co-founder of Ethereum, has expressed his support for decentralised autonomous organisations (DAOs) multiple times over the years. He has even shared his views on how they can be implemented and what enhancements can be made to make them more viable.

Perhaps the most prominent example of this would be a detailed blog post he wrote in September 2022, explaining where DAOs would benefit from decentralisation. According to Buterin, the post was even reviewed by Karl Floersch (Optimism Labs CEO and co-founder) and Tina Zhen (Flashbots co-founder).

Let’s zoom into several highlights in Buterin’s post and scour the Internet for more takes on DAOs.

What Are the Key Points of Buterin’s Perspective?

1. Decentralisation for DAOs Is Important. Period.

Buterin’s opening paragraph posits that individuals who support the greater centralisation of DAOs to boost decision-making quality and efficiency are wrong. He argues that DAOs should focus on the application of decentralisation.

The Ethereum co-founder lists examples of how various DAOs apply decentralisation flexibly in order to meet their goals without allowing power to concentrate and corrupt.

2. DAOs Can Make Better Decisions With Greater Decentralisation

This is true for situations where a compromise would be better than a 'one-or-the-other' decision, according to Buterin. For example, two proposals boasting high potential which require funding can each receive a smaller amount, rather than just one being approved for all the capital available.

However, Buterin does state there are caveats to this. For example, an army splitting up its forces to attack two fronts has a greater chance of being wiped out entirely.

3. Decentralisation Is Needed to Resist Censorship

According to Buterin, MakerDAO and Reflexer DAO are 'excellent examples' of resisting censorship while being reliable and set up for long term success. He mentions that DAOs need to be decentralised in order to protect themselves from external attacks, whether by large corporations or nation states.

This is true for blockchain projects as well, which prevents transactions from being manipulated.

4. DAOs Need Decentralisation to Operate Smoothly

It’s easy to assume DAOs have no structure as proposals and decisions need to be voted on by the masses before a smart contract automatically carries them out. However, this could not be further from the truth. DAOs need to make subjective decisions occasionally, some more so than others.

Therefore, Buterin says DAOs require “an unavoidable need for 'governance', and pretty robust governance too”.

5. DAOs Stand to Learn From Political Science Principles

Buterin explains this is especially true when DAO founders and/or executive members need to pass on the torch. He believes political structures like democracy can guide DAOs when the need for succession arises. And democracy in practice requires a fair vote from members of an organisation. Sounds familiar?

More Hot Takes on DAOs

General Views on DAOs

Curtis Yarvin: “DAOs can be optimised by including elements of corporate governance”

The American philosopher believes DAOs are inefficient when compared to large companies. However, he feels DAOs can mature into ‘optimal autonomous organisations’. This requires having governors to select a manager and ensure – along with the participants – they keep things running smoothly.

Defending DAOs

World Economic Forum: “Because of their unique structure, DAOs offer the promise of enabling a focus on community, rather than just profit”

This globally recognised non-government organisation believes DAOs are crucial in helping individuals around the world enjoy prosperity as opposed to a concentrated group of shareholders. The World Economic Forum feels that DAOs can provide meaningful change for corporate organisations, which have adopted similar styles for centuries.

GFT: “DAOs have the potential to offer more equitable arrangements than traditional organisational structures”

IT service management firm GFT feels that DAOs hold a lot of potential for both private and public companies, especially with how they’re structured. GFT highlights how adopting a DAO structure allows an organisation to boost transparency, tap into a global talent pool when hiring, and lower setup costs.

Deriding DAOs

Grace Rachmany: “Despite millions of dollars having been invested in development, DAOs suffer from a failure to find product–market fit”

The DAO expert was highly critical about the state of DAOs in 2021. She felt that although the technology held much promise, it was only used to create mechanisms for voting and allocating funds. She emphasised that a large amount of money was spent on this technology, only for the result to be lackluster.

Awa Sun Yin: “DAO governance is riddled with problems and voting is a farce”

In a 2023 article, Namada and Heliax co-founder Awa Sun Yin exposed the centralisation of power in top DAOs. She explained this was because a large portion of DAOs are formed offline, rather than in a democratic or organic process online. This was a fundamental problem, betraying the ‘decentralised’ in ‘decentralised autonomous organisation’.

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*Disclaimer: The information provided on this blog does not constitute investment advice, financial advice, trading advice, or any other form of professional advice. TMRWDAO makes no guarantees or warranties about the accuracy, completeness, or timeliness of the information on this blog. You should not make any investment decisions based solely on the information provided on this blog. You should always consult a qualified financial or legal advisor before making investment decisions.

About Tomorrow DAO

Tomorrow DAO (TMRWDAO) is an advanced decentralised governance platform built on the aelf blockchain, a high-performance Layer 1 network. Launched in 2024, TMRWDAO leverages cutting-edge AI technologies and intuitive no-code interfaces to empower communities in establishing and managing decentralised autonomous organisations (DAOs) with unparalleled efficiency. Committed to revolutionising governance, TMRWDAO stands at the forefront of the movement towards a more transparent, inclusive, and democratically governed digital future.

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