Vitalik Buterin advocates for more efficient and secure DAOs with privacy

Source: PortaldoBitcoin Original Title: Ethereum Founder Vitalik Buterin Advocates for “Different and Better DAOs” Original Link: Vitalik Buterin, founder of Ethereum, argued that the modern design of DAOs is “inefficient, vulnerable to capture, and completely fails to mitigate the vulnerabilities of human politics.”

In a tweet, Buterin said he used to believe that existing code systems and rules in decentralized networks could “manage resources and direct activities more efficiently and robustly” than conventional governments and corporations.

However, he stated that since the founding of Ethereum, DAOs have practically shifted to “essentially referring to a treasury controlled by token holder voting.” This, according to him, makes them vulnerable to control by centralized actors and has caused many observers to be skeptical of DAOs as a concept.

“We need more DAOs – but different and better DAOs,” wrote Buterin.

Among the solutions he proposed are improvements to the oracles that feed DAOs and DeFi protocols. In cryptocurrencies, blockchain oracles connect blockchains to external real-world systems, enabling smart contract execution by linking on-chain and off-chain data. Buterin criticized both token-based oracles and human curation, classifying the latter as “less decentralized.”

Buterin identified two core issues that, in his opinion, need to be addressed for DAOs to function effectively: privacy and decision fatigue.

“Without privacy, governance becomes a social game,” he stated.

He said modern technology could open “the doors to a renaissance” in solving these problems, specifically the use of zero-knowledge proofs (ZKPs) for privacy. In cryptography, a zero-knowledge proof is a method used to prove that something is known without directly revealing the information, which can be useful for privacy-focused applications.

Buterin also highlighted AI’s ability to reduce decision fatigue but warned against using large-scale conventional language models to manage a DAO.

Zero-Knowledge Proofs and DAOs

Harry Halpin, CEO and co-founder of Nym Technologies and former MIT researcher, said that technology can help DAOs operate more fairly.

“DAOs are the future of democratic politics, and just as we don’t want our votes for president in a national election to be public, we also don’t want our token governance votes to be public,” Halpin said, adding that “zero-knowledge proofs are a way to achieve this.”

Halpin acknowledged that zero-knowledge DAOs are not yet “technically mature,” but said Nym would be happy to adopt them once the software is ready. He cited projects like AnonDAO, a project associated with a privacy-focused layer-one blockchain, as proof that private DAO governance is feasible in practice.

“Zero-knowledge DAOs are the future of democratic politics,” Halpin added. Members of the DarkFi project said they were inspired by the AssangeDAO project, which helped raise over $50 million for political activism.

Rachel Rose O’Leary, founder and lead developer of DarkFi, stated that “transparency forced us to hand over control of funds to a non-profit foundation outside the blockchain” during her work on AssangeDAO.

“DAOs can’t do anything concrete without anonymity,” she said. “Give anonymity to DAOs, and you will give them real political power.”