Ethereum’s Vitalik Buterin Explains Why DAOs Are Not Supposed to Function as Corporations


Ethereum’s Vitalik Buterin argues that decentralized autonomous organizations shouldn’t function as corporations in order to remain efficient

In a recent blog post, Ethereum co-founder Vitalik Buterin argued that decentralized autonomous organizations (DAOs) should not equate to corporations.

He rejects the argument that it is naive to assume that the ideas of decentralization do not work in the real world, which is why traditional corporate structures are supposed to be more efficient.

Buterin argues that concave decisions, which are made by relying on the knowledge of the crowd, are better than convex ones. Therefore, he argues that a DAO with diverse inputs “makes a lot of sense.”

The main problems

However, there are still some issues. As Buterin points out, the main challenge for DAOs s to solve the so-called “succession problem.” Such organizations have to make sure that they will still function if the original group retires.

According to Buterin, the DAO will also have to deal with “unexpected uncertainty.” The Ethereum co-founder acknowledges that a governance-inspired approach to solving such issues may seem preferable.

Buterin claims that some DAOs will have to resemble “constructs from political science.”

Is Linux the answer?

Venture capitalist Bill Gurley claims the Linux Foundation is the model Buterin is looking for. However, such a model does not even require a blockchain or tokens.

However, some have noted that the Linux Foundation is actually not decentralized enough since it has a CEO.

Bill Barhide, founder of Abra Global, says that a DAO should ideally have an off switch that would be controlled only by software.


Read Previous

Shiba Inu Q4-2022 Prediction: SHIB Price Might See 2x Rally by End of Year

Read Next

Better Business Bureau Warns of Cryptocurrency Investment Scams on Tiktok

Leave a Reply

Your email address will not be published. Required fields are marked *

Right Menu Icon