Futarchy aligns incentives by rewarding participants who accurately predict outcomes, encouraging informed decision-making. Similarly, DAOs governed by token voting aim to align the interests of participants through token-based incentives.
Some DAO’s use token governance, some DAOs use futarchy. Other DAO’s employ a combination of both of these, or more. DeanslistDAO is an early adopter of futarchy, having exposure to the MetaDAO project through connections in the Solana ecosystem.
MetaDAO offers Futarchy as a Service, or FAAS, allowing communities to leverage the prototypical technology. Experimenting with Futarchy, Dean’s List DAO began moving some proposals onto decision markets.
Due to a bug in MetaDAO’s FAAS program, one of the conditional tokens was not being “cranked”, which would indicate to the appropriate aspects of the program the variable demand for that side of the market, and thusly the conditionality itself. This caused the proposal to fail, despite the indication from the trading on the markets, which would have seen it pass.
Proph3t, MetaDAO’s benevolent dictator, issued an in-depth post-mortem specifying the nature of this bug, and subsequently provided the traders on the futarchy markets a full refund of their deposited tokens by purchasing them at market value on Jupiter at quantities determined using a built-to-suit script developed for this sole purpose.
In an incredible initiative, while not expected or required, Proph3t secured the good faith of the Dean’s List community at personal cost.
Participants in experimental markets should not grow accustomed to this level of generosity, and should always employ due diligence and wallet security best practices.
As time goes on, I’ll want to shift our mentality from “move fast and break things” toward hyper-focus on security. But for now, decision markets are still beta software and I expect future hiccups. ~ Proph3t
Futarchy could potentially lead to more efficient decision-making compared to traditional permissionless systems. It also requires a robust framework to ensure markets are fair and not manipulated. Has that framework been achieved yet via MetaDAO’s FAAS?
Futarchy can theoretically democratize decision-making by allowing anyone with insights to participate, potentially leading to more equitable outcomes if diverse perspectives are accurately represented, but the model requires participants to have the resources and knowledge to engage in prediction markets, which might limit participation to those with financial means or market expertise, potentially reinforcing existing inequalities.
The last thing any one wants to do is exacerbate the wage gap, right?
This means information is to futarchy markets what governance tokens are to DAO voting.
Data is money- Beta becomes bread.
By focusing on outcomes rather than processes, futarchy aims to prioritize policies that deliver measurable benefits, and that could lead to more equitable socioeconomic policies if the metrics for success are aligned with equity goals.
Futarchic decision markets, such as those offered by MetaDAO, provide an innovative approach to governance that combines market dynamics with decision-making processes. While they hold potential for enhancing efficiency and aligning incentives in governance, ensuring socioeconomic equitability requires careful consideration of accessibility, metric selection, and market integrity.
Integrating futarchy into existing governance structures could complement other forms of decentralized decision-making, contributing to more effective and equitable outcomes if designed with inclusivity and fairness in mind, but the current route to do so seems to have a few obstacles.
Without taking care to facilitate the equitable dissemination of information to everyone, decision markets stand a fair chance to accelerate wealth inequality. In order to incentivize that dissemination, the fundamental human principle of greed should be addressed.
Is greed really a result of need?
Where does need stop, and greed start?
How does a landscape of limited opportunity impact the ability of everyday people to participate in experimental markets?
How does it impact the thought processes of businesses, organizations, and companies? Is all the dog-eat-doggery just a means of self preservation?
Where does greed stop, and need start again?
How does risk impact wealth consolidation?
How does information impact decision making?
Information inequality isn’t any different than income inequality, especially when we’re adding the amplifier and distortion pedal that is futarchy to the information economy.
There is a type of knowledge that leads to wealth, and it is hoarded the same, this wealth-knowledge.
