futarchy

My thoughts on the future of governance and the project i have the highest hope for 2024.

The hard part here is not what to write but what not to write. Too many rabbit holes.

I'll skip most of it and focus on the essential 🧵

Democracy is government of the people, by the people, for the people

But the people are retarded ...

So let us say, government of the retarded, by the retarded, for the retarded

dev, armchair economist & crypto tea leaves reader - 

/futarchy /network-states x.com/nicovrg_




Most people don't know what's good for themselves

Democracy don't work. I'd argue an enlighten dictator does a better job

DAOs don't work. I'd argue an enlighten founder does a better job

The reason we have these is because we can't trust an enlighten dictator or founder not to go senile or his successors not to be incompetent or evil

Yet there is something even more sad: social intelligence doesn't scale

How come a single brain can outmatch thousands/millions of brains?

Democracies are neural nets without layer or weights. Output is garbage

DAOs are neural nets without layer and token are used as weights. Whales weight void the rest of the graph. Output is corrupted

There were attempts to improve DAOs with things like quadratic voting but most of the innovation can't be built today because of missing primitives (identity, reputation, knowledge, time spent, energy etc ...)

Imo a system with proper layers and weights would be far superior at leveraging collective intelligence

There is more compute and data in the brains of all employees/citizens (leader included) than in the brain of the leadership

What if governance looked something like this?

How do we do this? 

This is the tricky part. Its extremely hard to find the right model and the easiest way to proceed would be iterative testing at a scale (space & time) the real world can't support

I'll not go into all this rabbit hole since its not the goal of this thread. I haven't give up on the idea yet. I'm just no sure where to start. Surely, there must be a more simple and elegant solution

Turns out someone found just that!

An economist that goes by Robin Hanson conceptualised "futarchy", a governance structure based on markets

An anon builder that goes by Proph3t implemented it on solana. 

It's called The-MetaDAO

Markets are free*
Markets are efficient**
Markets have no emotions
Markets have no carrer risk
Markets are apolitical
Markets aren't woke

They transfer wealth from the ignorant to the wise
They aggregate all information into a single number, price

* if not corrupted by forms of printing lile monetary policy, naked short etc ...

** on the long run, efficiency is a spectrum

Market participants have capital at stake

We don't need layers, traders are incentivised to stay out if they don't think they have an edge, they'll jump in if they do

We don't need weight, traders capital will increase if they are pertinent and decrease otherwise

Futarchy are easier to implement. There are different way of doing so. I think metadao conditional market is a beautiful design

Futarchy is a new design space that has yet to be tried & experimented with

One area i think futarchy would be far superior to team multisig or to dao is grant

Futarchy optimise for value accrual. Grants would pass if market believe it'd add value. It'd remove biais & politics shenanigans

How does it works?
The $META token is the base of our futarchy

Anyone can submit a proposal (description + svm instructions to be executed)

Once submitted, two markets are created, we call them conditional markets

How does it works?

The $META token is the base of our futarchy

Anyone can submit a proposal (description + svm instructions to be executed)

Once submitted, two markets are created, we call them conditional markets

Futards can mint conditional token - pair of $pMETA & $fMETA - representing respectively the value of the token if proposal pass or fail

These markets trade simultaneously for a period (now set to 3 days)

The market with higher twap (time weighted average price) will be finalised & the market with the lower twap will be discarded

It all happens onchain. If the proposal pass ($pMETA twap higher than $fMETA twap) the proposal svm instruction will be executed

One thing that futarchy will need to work around is keynesian beauty contest (market participants trading based not on outcome of proposal but on other trader perception of outcome of proposal - can be recursive)

I'm curious to find out if/where futarchy fails. Many scenarios have been discussed on the discord

Proph3t is the perfect person to lead this project. He is a chad dev & a true market nerd. He believes this is the most important thing to work on and i've seen him commit his time & energy doing the hard, right thing

Maybe it'll turn dystopian, maybe it won't

For me, The Meta-DAO is a beacon of hope. Its home to a weird breed of market nerds

The level of discussion, the strong core of early contributors etc... its something you don't see that often. Esp on new radical ideas

I'm at peace knowing i have a project to spend this cycle contributing to that i think can really push governance 

I believe its one of if not the most important thing to push society forward

Thank you proph3t for futarchy pilling me

Join us anon

website: https://app.themetadao.org
documentation: https://docs.themetadao.org
twitter: https://twitter.com/MetaDAOProject
discord: https://discord.gg/metadao
dune: https://dune.com/metadaohogs/themetadao
flipside: https://flipsidecrypto.xyz/pine/meta-dao-metrics-yG-0MP

Now i'll add a few words about some people i've met in the metadao discord, old and new friends i'm happy to share this adventure with

7LayerMagik the solana validator guru that i learn a ton from. he always pushed the technical discussion on solana forward with his good questions & constructive criticism

0xTuti the shipoooor. market nerds, hobbyist market maker, 10x developer, if he needs something he'll

Dodecahedr0x the first contributor. another awesome dev that share my love for baguettes. he joined the ride before me, he helped out proph3t with the openbook stuff & made the first ui because proph3t ui was barren, might as well trade from the terminal lol

@swaggymarie our designer. she help us polish the interface, made the first sketches on figma and then implemented the design on the frontend. she now works on the proposal to build a bribe plateforme with saber

durdenwannabe & dj_d_sol who are always here to give feedback on everything defi wise. reading them can make your head hurts but you'll learn something esp when they disagree

Henry_E__ the anchor contributor that i have to thank for anchor and for his contribution to metadao, esp constructive criticisms

_Dean_Machine for helping out with the community side of things 

bigz_Pubkey for pushing the discussion, for the memes, for hog, for review prs!

StrategicHash for the love, for the support, for helping spread the message out on twitter

stayrar3 for pushing the first proposal i disagree with 

joebuild for building the new pass/fail architecture with amm
 
jktrader16,  r0bre, beeman, zen_llama, 0xIchigo and many others that took some of their time precious time to come debate with us

like proph3t said in the beginning, a small, strong core community of sharp people. the quality is high, we have sharp people with different knowledge/skillset and great vibes. this shows metadao is on something, because of who it attracted

can't wait to see what we'll have achieve in 2024

if i could pick only one project to contribute to aside from my side stuff, it'd be this one

now for me next step is pushing forward futarchy as a service to see more futarchy, to see more people experimenting with it, to see where the model fails, where the model shine, to speed up the learning