What is the biggest challenge for DAOs?
Unaligned incentives between insiders and outsiders hinder participation.
Insiders control votes, outsiders lack incentives, and DAOs miss out on new ideas.
Unaligned Incentives
In traditional DAO voting, insiders dominate decision-making, leaving outside investors and contributors without real influence or protection.
Limited Outside Participation
Outside contributors lack incentives to make meaningful proposals. Most external input is limited to funding requests or partnership proposals.
Missed Opportunities
Insiders struggle to encourage wider participation, missing valuable ideas without proper evaluation mechanisms or effective reward systems.
Meet
Harnessing evaluation and reward mechanisms to replace majority voting.
Using markets to govern.
Conditional Markets Predict Outcomes
Two markets estimate share prices based on proposal passing or failing. Reflecting potential impacts on value.
Investors Buy or Sell Shares Instead of Voting
Supporters buy shares if the proposal passes; opponents sell shares if it passes. Trading actions replace traditional votes.
Market Prices Reveal Proposal's Expected Impact
Supply and demand determine the price difference. Market estimates quantify the proposal's potential effect.
Choosing What Maximize Shareholder Value
Markets select the option statistically increasing token value. Highest predicted value outcome gets implemented.
From Advisory to Self-Enforcing
Starts as an advisory tool complementing governance. Can evolve into a self-enforcing decision-making system.
Guided by the Inventor of Futarchy
Robin Hanson - Chief Scientific Officer
Robin Hanson created the concept of futarchy in 2000 - using prediction markets for governance. As a professor at George Mason University and research associate at Oxford's Future of Humanity Institute, he developed the foundational theory of how markets can make better decisions than traditional voting or expert opinions. His groundbreaking paper "Shall We Vote on Values, But Bet on Beliefs?" shaped the future of organizational governance.