Ethereum Co-Founder Vitalik Buterin Defends DAOs Against Critics

Buterin believes that collusion and corruption can be minimized when decision-making power rests with the whole group, rather than one individual or a small minority.< /p> New

Ethereum co-founder Vitalik Buterin has come to the defense of Decentralized Autonomous Organizations (DAOs), saying that in certain circumstances they can be more efficient and fairer than a traditional corporate structure.< /p>

In theory, DAOs are collectively owned and managed by their members and have no central direction. All decisions on aspects such as the use of treasury funds or protocol improvements are made by voting on proposals submitted to the community.

In the lengthy September 20 post on his website, Buterin pointed out that critics often claim that DAO governance is inefficient, that DAO idealists are naïve, and that traditional corporate governance structures with boards and CEOs are the optimal methods for making key decisions.< /p>

DAOs Are Not Corporations: Where Decentralization in Autonomous Organizations Mattershttps://t.co/PDh9tIRXcm

However, the Ethereum co-founder believes that "this position is often wrong" and claims that even naïve forms of compromise are on average likely to outperform centralized corporate structures in certain situations. Although he thinks it depends on the type of decision which he says falls into two categories; convex and concave.

Examples of convex decisions include pandemic response, military strategy, and technology choices in encryption protocols. While concave decisions include judicial issues, funding of public goods and tax rates.

"If a decision is concave, we would prefer a compromise, and if it is convex...