Vitalik Buterin proposes a new DAO paradigm: from function convexity to adaptive governance

According to ChainCatcher, Vitalik Buterin, the creator of Ethereum, raises a pertinent question about the fact that modern decentralized autonomous organizations (DAOs) have significantly deviated from their original purpose. His analysis goes beyond simple criticism, offering an innovative framework for rethinking DAO architecture through the lens of convexity of functions and adaptive governance mechanisms, which could radically change the industry’s approach to designing decentralized systems.

The problem with current DAO design: controlled tokens instead of true decentralization

Buterin notes that although Ethereum was originally inspired by the idea of DAOs as fundamental infrastructure, the current reality looks quite different. Most existing DAOs have transformed into what he calls “controlled token repositories” — structures that formally operate as decentralized organizations but essentially remain centralized decision-making systems.

The issue is not in the technical implementation but in the fundamental design. These organizations are easily manipulable, susceptible to political influence, and often ineffective at solving real problems that require coordination and trust. Buterin emphasizes that the problem lies not in participant motivation but in deep flaws in governance architecture and data systems on which these organizations are built.

Governance framework: convexity and concavity applied to DAO

Buterin’s innovative contribution lies in introducing the analytical concept of “convexity and concavity of functions” applied to governance design. This mathematical abstraction helps explain why different types of problems require radically different management approaches.

Scenarios favoring consensus and long-term stability should prioritize broad participation and resistance to manipulation — this requires a “concave” governance structure that diffuses power. Conversely, situations demanding quick and decisive actions should allow for concentrated leadership, balanced by decentralized checks — this is a “convex” governance function focused on efficiency.

Buterin asserts that the true art of designing DAOs lies in correctly identifying the type of problem and choosing the appropriate governance structure, rather than trying to apply a one-size-fits-all approach.

Technological solutions: privacy, oracles, and AI as core components

Buterin further defines where DAOs can truly add value to the ecosystem. Their application includes improving oracle designs (mechanisms for obtaining data from external sources), ensuring fair dispute resolution on the blockchain, maintaining critical registries and lists, coordinating short-term joint projects, and providing long-term maintenance and development of projects after launch.

However, for DAOs to effectively operate in these scenarios, they must address two critical challenges: privacy and decision fatigue.

Privacy technologies such as zero-knowledge proofs (ZK) and multiparty computations should become integral parts of DAO architecture, protecting participant information while maintaining process transparency. Simultaneously, AI-based tools can significantly reduce cognitive load on participants, helping them process complex data and offering well-founded recommendations.

A crucial aspect of Buterin’s understanding is the role of AI: artificial intelligence should not replace human judgment but serve as a tool to enhance human capabilities and align decisions with genuine intentions.

The future of decentralized organizations: an integrated approach to design

Buterin’s main message is that future DAO projects should consider governance mechanisms, privacy technologies, systems based on function convexity, and communication levels not as auxiliary modules but as core components of their architecture from the outset.

Only in this way can true decentralization and the resilience of Ethereum’s foundational infrastructure be preserved in its high-level applications. Rethinking DAOs is not just a technical task but a reevaluation of management philosophy, which must harmoniously integrate human intentions, technological possibilities, and mathematical principles of convexity to create truly effective decentralized organizations.