When power distribution becomes a game of token quantities, autonomous organizations gradually evolve into financialized voting machines. That’s why more and more people are feeling disappointed with the current DAOs.

Recently, I came across a statement by Ethereum co-founder Vitalik that struck a chord with many. He pointed out that most DAOs are caught in the same vicious cycle — token holders control the treasury through voting, and there are no other governance methods. We’ve all experienced this model, and sometimes it even feels powerless.

I have participated in the governance operations of several DAOs. My deepest impression is that voting power is actually concentrated in the hands of a few large holders. Ordinary investors, no matter how they vote, have little impact on the final outcome. What’s more annoying is the efficiency issue — a proposal’s voting process can take several days, sometimes even one or two weeks without a result.

Vitalik’s criticism hits the mark. His vision for the future of DAOs, to some extent, also points a way out for projects stuck in a dilemma.

**Three Fundamental Problems with Token Voting Schemes**

Most DAOs currently use the token voting system. At first glance, it seems democratic, but the problems are significant:

Decision-making is slow as a snail. Discussions, proposal writing, voting cycles — this process exposes its weaknesses in emergencies. For example, a DeFi protocol faced a security risk, but because DAO voting took three days to complete, it nearly lost a large amount to hackers.

Power is severely concentrated. Vitalik mentioned that the Gini coefficient of DAO wealth is as high as 0.89, which means that the inequality of wealth and voting power has reached an extreme level.