(2016-05-23) The Father Of Futarchy Has An Idea To Reshape Dao Governance
The Father of Futarchy Has an Idea to Reshape DAO Governance. Sixteen years after Robin Hanson published a seminal paper on using prediction markets to inform governance decisions, his ideas have found a home in the Ethereum community.
until now, no one has ever implemented the idea in the real world
Recent moves in the Ethereum community have provided an avenue for these concepts to move closer to implementation. In interview, Hanson offered why he believes his simple idea finally found a fit in a distributed, autonomous world.
*He told CoinDesk:
“The slogan is vote on values, bet on beliefs. What you need are discreet decisions and then you need an outcome that you care about.”*
When applied to a blockchain-based corporate structure, also known as a distributed autonomous organization (DAO), the prediction market concept could empower stakeholders to vote their outcome beliefs.
Last week, Ethereum-based prediction market Gnosis published a private version of a proposal to augment The DAO – an organization aimed at funding Ethereum projects that has collected more than $150m worth of the cryptocurrency ether since its launch earlier this month – with a Futarchy-based prediction market used to vote on the pitches it receives.
Buterin had published a piece called “Introduction to Futarchy” that included a detailed description of how the concept functions, an account of Hanson’s CEO example, as well as five arguments against Futarchy.
Traditionally, information is provided to prediction markets like casinos in the form of a trusted third party. But in the decentralized world of DAOs that information could come from what is called an “oracle”, a source of information that relies on the “wisdom of the crowd” to formulate its answers.
Users of Gnosis, for example, will be able to “sign” data which can then be used to help resolve events pertinent to other users’ desired decisions. For example, the data provided would give insight into whether a sports team actually won a game, or if a CEO actually delivered on the promises they made.
using rewards to dissuade corruption is a long way from actually preventing it.
On 25th April, Liston and Köppelmann won a $15k grant from the Ethereum Foundation to conduct three separate experiments on Futarchy using the Gnosis technology
Hanson suggested that special attention ought to be paid to precisely how predictive questions are phrased before they are put to the market for feedback. He told CoinDesk: “The key thing is you want to ask the question that you actually want the answer to, and you want to ask people who might actually be able to answer.” (Claim-Refactoring Service)