Futarchy needs ‘one great success’ to become Solana’s go-to governance model

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MetaDAO is a group that pioneers markets-based governance. “futarchy” Many people who have worked with Solana are familiar with the concept, but it has only been adopted in a limited number of cases.

The situation could change, however. As of today, the Sanctum liquid stake startup is the first Solana platform to adopt MetaDAO as its governance system. The first market for decision-making has attracted more than 200 trades within three hours. MetaDAO pseudonymous creator metaproph3t explained to me recently that they saw the Sanctum as an opportunity to increase trust and show futarchy is a viable system, which could lead to a possible adoption flywheel.

Robin Hanson is an economist at George Mason University who coined this term to describe a form of governance where the markets take decisions rather than leaders or voters. MetaDAO is bringing futarchy in Solana Governance. 

The experiment is generally well thought of in crypto, especially since traditional token-voting DAO systems have their warts — and can sometimes be accused of being a little too trigger-happy with treasury funds.

Solana’s governance platform, Realms (which allows token-based voting and traditional DAO models) is more popular. MetaDAO is the preferred governance platform for well-known projects such as Jito and Drift, although they also have Realms Pages.

Metaproph3t said they think MetaDAO can become the default governance platform for Solana — like, say, what Snapshot is to Ethereum — within six to 18 months. But they also added: “I don’t think I foresaw just how much friction there is involved in someone learning how futarchy works.”

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MetaDAO offers pass-fail markets to govern proposals. The pass-fail market allows anyone to trade by making bets or options on the outcome of the governance proposal. Markets that forecast a positive outcome in terms of the token price are successful, but only those users who placed trades on this market get their transactions executed at market determined prices. Buyers who are bullish buy the native token, and are paid in USDC. Sellers who are bearish do the opposite.

It’s a little confusing at first. But metaproph3t has the right skills to oversee this wonky project. They summarized Geoffrey Moore’s Crossing the Chasm in great detail at one point during our discussion to prove a point.

Metaproph3t responded that many technologies are used without understanding them.

“Who actually understands how a car engine works?” They asked.

I asked Sanctum’s co-founder FP Lee about what would be required for MetaDAO become the default DAO platform of Solana Projects.

“One great success,” “He replied,” he said. “If we embrace it full-throatedly, and people see that it works, it will be embraced fully.”

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leadzevs/ author of the article

LeadZevs (John Lesley) is an experienced trader specializing in technical analysis and forecasting of the cryptocurrency market. He has over 10 years of experience with a wide range of markets and assets - currencies, indices and commodities.John is the author of popular topics on major forums with millions of views and works as both an analyst and a professional trader for both clients and himself.

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