Why DAOs need to rethink governance beyond tokens?

When DAOs first burst onto the scene, they promised something beautiful: open participation, collective decision-making, and true decentralization.

One token, one voice... right?

Well, not quite. Fast forward to today, and that dream looks a little rough around the edges.

The harsh reality? Token-based governance has serious cracks, and if DAOs don’t rethink their foundations soon, they risk becoming exactly what they set out to replace.

Let’s talk about it.

Where Token Governance Went Wrong

On paper, token voting sounds fair. Own more, vote more. Simple. But in practice, it’s become a playground for whales.

Look at what happened recently:

A user rented 19.3 million ARB tokens for just 5 ETH, manipulating a critical committee election. This incident highlighted how cheaply influence can be bought. A study by Chainalysis found that in ten major DAOs, less than 1% of holders control almost 90% of the voting power. Just think about that.

And it’s not just statistics, it's happening live. In one Solend governance vote back in June 2022, one whale cast over 90% of all the “yes” votes. One person decided the fate of the whole thing.

Even worse, bribery isn’t hiding in the shadows anymore. Over at Curve DAO, a proposal called “LobbyDAO” openly laid out a strategy to pay voters for supporting proposals. No shame, no subtlety. If you show up and vote the right way, you get a cut. Governance turned into a marketplace.

And while there hasn't yet been a major flash-loan attack on a DAO vote, the risk hangs in the air. MakerDAO already saw an attempted flash-loan governance attack back in 2020. It failed that time, but the lesson was clear: if someone can rent enough tokens fast enough, they can hijack a DAO temporarily. It's only a matter of time unless real protections are put in place.

But maybe the saddest part?

Most people just... don’t vote.

Across the board, DAOs are struggling with chronic voter apathy. Messari research calls it one of the biggest issues in governance today. Even at Optimism DAO, they had to raise their quorum requirement from 10% to 30%, because too many proposals were barely scraping by with a handful of votes.

In the end, a system that was supposed to be for everyone has ended up being decided by a few whales and a few wallets.

And if you listen to the people inside these DAOs, it’s clear:

“Token governance feels like a shareholders’ meeting where money talks loudest.” ,Uniswap delegate

“My votes don't matter because I don't hold millions of tokens.” , MakerDAO forum user

Bottom line: token-based governance concentrates power. It sidelines regular contributors. And it opens the door to manipulation.

But Can’t We Just Set Token Thresholds?

Some DAOs tried fixing the problem by setting minimum token amounts for voting or proposing changes. But honestly? It’s like putting a band-aid on a sinking ship.

Small holders are still pushed to the margins.
Sybil attacks are easy, you can just spread tokens across multiple wallets.
Flash loans let bad actors rent voting power in seconds and skew results.

Thresholds don’t fix the root problem: the system still rewards capital, not people.

Is 1p1v the Answer?

At first glance, switching to a one-person-one-vote (1p1v) system seems like the perfect fix. No whales. No buying influence. Every human gets a fair say.

And honestly? It is a huge improvement over token voting.

But it’s not a silver bullet either. In a 1p1v system, a random X (formerly Twitter) troll and a core protocol engineer have exactly the same voting power. That’s great for equality, but not always great for making highly technical decisions.

And don’t forget the issue of voter turnout. Moving to 1p1v doesn’t automatically fix apathy. If people didn't care enough to vote with tokens, they might not care more just because they have a single vote now. Even though I believe it will still spike interest if people aren’t bound by tokens to vote.

So, starting from one-human-one-vote is a giant leap forward compared to what we have today. It just needs to be layered with a little more nuance.

It’s harder than it sounds. Especially if you still want to protect privacy and keep things decentralized.

So How Do We Actually Fix This?

If DAOs want to fix governance for real, it’s not about choosing between tokens or people.It’s about blending the strengths of both , and designing systems that match the complexity of the real world.

Every voter must be a verified, unique human being, in a privacy-respecting way, of course. Humanode Biomapper, or similar confidential solutions, make this possible today without KYC nightmares.

But after uniqueness, governance models should adapt based on the kind of decision being made.

For broader community proposals, things like grant distributions, mission setting, or public goods, pure 1p1v makes perfect sense. Everyone’s voice should carry equal weight in shaping the future vision.

But when it comes to more technical or risky areas, like protocol upgrades, treasury management, insurance pools, maybe it makes sense to layer in expertise, reputation, or even financial commitment.

And here’s where some really interesting governance innovations come in.

Exploring Better Voting Models

Take quadratic voting, for example.Instead of one-token-one-vote, voting power becomes non-linear.

The more votes you want to cast, the exponentially more expensive it becomes.

In practice, that means a whale can’t easily drown out 1,000 small holders anymore, because each additional vote costs them more and more.

Quadratic voting isn’t perfect either, it can still be gamed if someone has deep pockets, but it massively raises the price of domination, making true community consensus much stronger.

Participation incentives also have a place.

Not bribes, but genuine rewards for active, thoughtful engagement. Curve DAO proposed revenue sharing with active voters through LobbyDAO. Optimism introduced paid delegate committees to boost decision quality. Some DAOs are exploring ideas like staking yields tied to voting participation, or refundable deposits for voting engagement.

The idea isn’t to pay people to care.

It’s to acknowledge that participation costs time, energy, and attention, and to reward that effort in a healthy, community-positive way.

And also, DAOs need real defenses against flash-loan attacks.

Simple techniques like delayed snapshots (locking in voter balances days before voting opens) and token lock-up periods can go a long way.

If your voting power comes from holding real tokens for real time, not just borrowing them for five minutes, the system becomes much harder to game.

Another idea is to set a threshold for a minimum number of votes in 1p1v voting, which, if not met, the voting will be moved back to token-based. This way, people won’t be able to point fingers when whales manipulate the voting.

Or a simple way is to adopt Vortex – Humanode’s proposed DAO.

Final Thoughts

Token-based governance was a start, but it was never the end. Pure one-human-one-vote is closer to the ideal, but even that needs context.

If DAOs want to live up to their original promise, true decentralization, real community power, they have to think bigger than just "votes per token" or "votes per human."

They need systems that start with verified uniqueness.
They need voting models that adapt to the type of decision at hand.
They need to design participation structures that reward real engagement, not just financial clout.

In short, they need to start treating governance like the complex, living system it is.

Because decentralization was never supposed to be easy.

It was supposed to be worth it.