Futarchy Deep Dive: Can Markets Make Better Decisions? | Proph3t
Episode publishedPodcast: Bell CurveBell Curve
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In my view, this is actually the core defining property of crypto as a whole, is regulation or regulatory resistance, regulatory arbitrage. I think some people are like, oh, crypto is just regulatory arbitrage. It's kinda like a put down. I actually think that's kind of a good thing. Right?
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for having me.
Yeah. I'm really excited to talk to you. This episode, the genesis of this was a somewhat, frustrated or exasperated tweet that I sent out maybe a week or two ago, which is, I'm sick of all the pessimism on the timeline. I think it's a really interesting time to be alive and especially an interesting time to be working in crypto. I think there's a lot of reason for optimism. So I wanted to start putting out, some more optimistic content around founders that have really interesting new ideas that I think are exciting. And you reached out to me, and I've been super interested in Futarchy for a w
Yeah. So Futarchy is actually a pretty simple idea, which is why it's surprising that, like, people haven't really explored it that much, which is essentially just make the decision with the market. Like use betting markets or speculative markets as a way of making decisions. The simplest feature I can think of is like, imagine two people are deciding whether or not to get pizza, like Alice and Bob. And Alice is like, Hey, Bob, I bet that if we go get pizza, you'll enjoy the pizza. And then if Bob is like, Okay, Alice is willing to put money on the line, so clearly she believes in this and the
Alright. So, walk us through so this idea of Futarchy grasped you quite a bit. And I think to some people, it might sound like a wildly outlandish idea, which is, hey. The way that we make decisions in society is
It is. Like
experts. Right? Yeah. It's a it's a bit of a far cry. Right? But, actually, when you get down into the weeds of it, it actually does make a bit of sense, especially even on an organizational level. Like, from my understanding, one of the key tenants of Futarchy is that there's still some sort of voting mechanism in that your elected representatives or citizens kind of would vote on the big core ideas. Right? Like, these are the goals for society. And then it's Futarchy that actually is more about the how. Right? So what the actual policies are that gets left up to the market. And what's intere
Sure. Yeah. So what you're kind of alluding to is this Robin Henson. Yeah. I mean, his motto for Futarchy is vote on values, bet on beliefs. Essentially, for any organization to make decisions, you need an objective function, you need something that you're optimizing for. In a country, it might be the welfare of the citizens, in a corporation, it's probably something like the shareholder value. So yeah, one way to resolve the question of picking the objective function is to vote on that. That's not the only way though, like with MetaDAO and Sanctum, which are what I would consider like the two
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