Global, May 2025: In a statement that could redefine how decentralized networks govern themselves, Ethereum founder Vitalik Buterin has outlined a crucial blueprint for the future of on-chain mechanisms. Buterin proposes a fundamental shift toward a dual-layer structure, cleanly separating the technical execution of decisions from the complex human process of value judgment. This framework aims to solve persistent governance challenges in blockchain ecosystems by preventing collusion and ensuring fair, pluralistic participation beyond mere token ownership.
Decoding Buterin’s Dual-Layer On-Chain Mechanisms
Vitalik Buterin’s vision, shared via a detailed post on the social platform X, moves beyond incremental upgrades. It presents a foundational architectural principle for next-generation decentralized autonomous organizations (DAOs) and protocol governance. The core innovation lies in the strict separation of two distinct layers: an execution layer and a value judgment layer. This separation is not merely technical but philosophical, addressing the inherent conflict between efficient automation and democratic, corruption-resistant deliberation. Historically, blockchain governance has struggled with this balance, often veering toward plutocracy—where the largest token holders wield disproportionate power—or becoming bogged down in inefficient processes. Buterin’s model directly confronts these issues by assigning clear, non-overlapping roles to each layer, a structure informed by years of observing governance successes and failures across the Ethereum ecosystem and beyond.
The Execution Layer: A Market for Outcomes
The first pillar of this new on-chain mechanisms model is the execution layer. Buterin describes this layer as functioning similarly to a prediction market, open to all participants. In this framework, specific, measurable outcomes are defined—for example, “Will Proposal X increase network usage by 10% within six months?” or “Will this code upgrade execute without a critical bug?” Participants then stake capital on these binary outcomes, profiting if they are correct and incurring losses if they are wrong. This creates a powerful financial incentive for accurate forecasting and rigorous due diligence. The layer’s strength is its objectivity; it deals in verifiable facts and on-chain data. This mechanism is not new in isolation; prediction markets like Augur and Polymarket have pioneered the concept. However, Buterin’s proposal integrates them as a core, formalized component of a governance system, tasked with answering the “what will happen” questions based on economic signals, leaving the “what should happen” questions to the other layer.
- Function: Operates like a prediction market for verifiable outcomes.
- Participation: Open to all, with financial incentives (profit/loss).
- Goal: To objectively determine the likely result of a decision or action.
- Analogy: A financial market that prices the probability of future events.
The Value Judgment Layer: Pluralism Over Plutocracy
The second, and arguably more radical, layer is dedicated to value judgment. This is where the model for on-chain mechanisms diverges sharply from traditional token-voting systems. Buterin asserts this layer “must be decentralized and pluralistic, and its structure should not grant influence based on token holdings.” Its purpose is to answer normative questions: Is this outcome desirable? Does this action align with the community’s ethos? Is this trade-off acceptable? To prevent capture by wealthy entities, influence cannot be purchased. Instead, the system must seek inputs from a diverse, representative set of stakeholders. Potential implementations could include:
| Mechanism | Description | Goal |
|---|---|---|
| Proof-of-Personhood | Systems that verify unique human identity (e.g., Worldcoin, BrightID) to grant one-person-one-vote rights. | Prevent sybil attacks and ensure human diversity. |
| Futarchy | A governance model where decisions are made based on prediction market prices, but here adapted for value inputs. | Use market signals to gauge collective values. |
| Sortition | Randomly selecting a small, representative group of users to deliberate on issues, similar to citizen assemblies. | Achieve statistical representation and informed deliberation. |
The Critical Role of Anti-Collusion Infrastructure
Buterin specifically highlighted the threat of collusion as a major vulnerability that any value judgment layer must overcome. Collusion—where participants secretly coordinate to manipulate outcomes for mutual benefit—can destroy the legitimacy of any decentralized system. To counter this, Buterin pointed to technical solutions like anonymous voting and Minimal Anti-Collusion Infrastructure (MACI). MACI is a cryptographic framework that allows votes to be submitted privately (preventing vote buying) while still being tallied verifiably on-chain. A trusted coordinator can process votes without learning how any individual voted, ensuring both privacy and correctness. This focus on anti-collusion tools demonstrates the practical, engineering-driven mindset behind the proposal. It acknowledges that good intentions are insufficient; the on-chain mechanisms must be architected from the ground up to resist corruption, making collusion technologically difficult and economically non-viable.
Historical Context and Industry Implications
This proposal does not exist in a vacuum. It arrives after a decade of experimentation and often painful lessons in crypto governance. Early DAOs, like The DAO in 2016, exposed security flaws. More recent protocol DAOs have grappled with voter apathy and low turnout, alongside the dominance of “whale” voters. The 2022 collapse of several centralized entities further accelerated the demand for truly robust, decentralized on-chain mechanisms. Buterin’s dual-layer model can be seen as a synthesis of ideas from futarchy, liberal radicalism for public goods funding, and quadratic voting, refined through the experience of Ethereum’s own multi-year transition to proof-of-stake. For the industry, widespread adoption of such a structure could lead to more resilient, adaptable, and legitimate decentralized organizations. It could enable complex coordination for public goods funding, protocol parameter adjustments, and treasury management without relying on centralized foundations or plutocratic control. The clear separation of concerns also makes systems more analyzable and secure, as the attack surface for each layer can be independently hardened.
Conclusion: A Foundational Shift for On-Chain Governance
Vitalik Buterin’s outline for a dual-layer structure represents a mature and crucial evolution in the design of on-chain mechanisms. By decisively separating the objective execution of decisions from the subjective judgment of values, and by mandating anti-collusion protections, it provides a clear template to build more fair, effective, and trustworthy decentralized systems. This approach directly addresses the core tensions that have plagued blockchain governance since its inception. While the technical implementations will require further research and rigorous testing, the conceptual framework offers a powerful north star. For developers, researchers, and community builders across Web3, this vision of dual-layer on-chain mechanisms provides a foundational blueprint for moving beyond the limitations of first-generation governance and building the robust, pluralistic digital institutions of the future.
FAQs
Q1: What are the two layers in Vitalik Buterin’s proposed on-chain mechanism structure?
A1: The two layers are the execution layer and the value judgment layer. The execution layer functions like a prediction market to determine likely outcomes, while the value judgment layer focuses on determining what outcomes are desirable or aligned with community values, without influence based on token holdings.
Q2: How does the execution layer work?
A2: The execution layer operates similarly to a prediction market. Participants can stake assets on the likely outcome of a specific, measurable event or decision. They profit if they predict correctly and lose their stake if they are wrong, creating financial incentives for accurate forecasting.
Q3: Why is preventing collusion so important in the value judgment layer?
A3: Collusion, where participants secretly coordinate to manipulate outcomes, undermines the fairness and legitimacy of any decentralized governance system. It can lead to outcomes that benefit a small, coordinated group at the expense of the broader community.
Q4: What is MACI, and how does it help?
A4: MACI stands for Minimal Anti-Collusion Infrastructure. It is a cryptographic system that enables anonymous voting on-chain. It allows votes to be tallied verifiably while keeping individual votes private, which makes vote-buying and coercion much more difficult because no one can prove how they voted.
Q5: How does this model differ from current token-voting governance?
A5: Current token-voting governance often ties voting power directly to token ownership (one token, one vote), which can lead to plutocracy. Buterin’s model decouples financial weight from value judgment, seeking pluralistic input through mechanisms like proof-of-personhood or sortition, and uses a separate, market-based layer for execution.
