Ethereum co-founder Vitalik Buterin has once again criticized the DAO governance model based on transferable digital tokens. According to him, it contradicts the meaning of decentralized organizations.

It is a contradiction to accept the adage that “those most willing to govern people are least fit to do so” and to support the management of DAOs by transferable governance tokens.

Transferable governance tokens are about giving *more* power to “those who most want to rule”.

— vitalik.eth (@VitalikButerin) 28 July 2022

“The proverb says: “He who wants to rule people the most is the least suitable for it.” Applies to transfer-controlled governance DAOs. Buterin wrote that transferable tokens are only needed to give more power to “those who want to rule more than others.”

Not all commentators agree with the Ethereum co-founder. Some stated on the inevitability of the consolidation of the decision-making process and the idea of ​​universal participation of DAO participants was called the “pipe dream”. Other registeredToken ownership cannot be equated with the desire to control people.

Earlier, Buterin repeatedly criticized the DAO governance model based on monetary voting. He stated in March 2022 that this approach is “a new version of plutocracy”.

In 2021, the co-founder of Ethereum published an article in which he proposed several ways to solve problems with such a governance system. For example, reputation indicators fixed on the blockchain can be used instead of tokens.

Recall that in the ten largest DAOs in the industry, 90% of the votes came from less than 1% of the owners of governance tokens, according to Chainalysis.

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