Overview
Vitalik Buterin, the founder of Ethereum, expressed concerns via Twitter regarding the current design of Decentralized Autonomous Organizations (DAOs). He believes they have evolved to primarily denote “a treasury controlled by token-holder voting,” which he argues is problematic.
Critique of Existing DAOs
Buterin criticized modern DAO structures as “inefficient,” “vulnerable to capture,” and ultimately ineffective in addressing inherent political weaknesses. He initially envisioned that decentralized systems could manage resources more effectively than traditional entities.
Need for Improvement
Stating “we need more DAOs— but different and better ones,” Buterin highlighted the need for innovative designs to enhance DAO functionality. He proposed improvements to the oracles that support DAOs and DeFi protocols, criticizing both token-based oracles and human curation as insufficiently decentralized.
Addressing Privacy and Decision Fatigue
He pointed out two main issues that must be addressed for DAOs to operate effectively: privacy and decision fatigue. According to Buterin, without privacy, governance becomes merely a social competition. He advocates for the use of zero-knowledge proofs (ZKPs) to safeguard privacy in DAOs.
The Role of Zero-Knowledge Proofs
Zero-knowledge proof specialist Harry Halpin emphasized that this technology could create fairer DAOs. He argued that, analogous to national elections, votes in token governance should also remain confidential.
Feasibility and Future Prospects
While Halpin acknowledged that zero-knowledge DAOs are not yet fully developed, he expressed optimism about adopting them in the future. Initiatives like AnonDAO illustrate that private DAO governance is achievable, suggesting significant potential for such projects.
Empowerment through Anonymity
Rachel Rose O’Leary, a core developer at DarkFi, elaborated on the necessity for anonymity in DAOs. She asserted that “DAOs cannot do real things without anonymity,” highlighting how it could enhance their political efficacy and power.
