[ExI] DAOs, Futarchy, and the future of Extropianism
monteluna at protonmail.com
Sun Apr 11 13:21:39 UTC 2021
A few months ago I brought up the idea of creating a DAO like system to further the extropian goals. It seemed to garner some interest and I figured I would bring it up again since more and more crypto systems on Ethereum have started to use Zero-Knowledge Proof technology to bring the costs down, making this idea more viable.
To give some more context to people who may have not been in the space, maybe a rough history would suffice.
A few years ago, the creator of Ethereum, a decentralized smart contract system, began talking about the idea of prediction markets. Prediction markets are a way for participants to "bet" on specific outcomes of real world events. Things like weather, political outcomes, sports, wars, are all able to be predicted on. In a high level sense, it's an automated market for people to bet on events, but it aggregates the bets to publicly produce a probability of the event. Because of this, they become "predictive" engines that aggregate information of all market participants. Participants with more information are encouraged to take advantage of the arbitrage opportunity and "bet more" for the outcome they believe to win, which reveal more information.
Read More: https://augur.net/blog/prediction-markets
An interesting component was created as well in the form of the first DAOs. DAOs are Decentralized Autonomous Organizations, which in the most basic sense, are smart contracts which manage funds. They can only do actions when collective owners vote on outcomes to release funds, making the operation of capital management a decentralized organization operation rather than something owned by charter of 5-8 people in a C-level suite. Currently, many DAOs operate managing billions in the Ethereum blockchain (MakerDAO, Compound, etc.)
A new concept which was also hypothesized was the idea of a futarchy. A futarchy combines the idea of an organization with prediction markets, allowing a decentralized group of bettors to make decisions. Since it couples prediction markets, the systems are able to aggregate information and should over time, allow capital accrual for people that make good decisions for the organization.
Read More: https://blog.ethereum.org/2014/08/21/introduction-futarchy/
So with this, with ZKSync tech, DAOs and Prediction markets now have viable options. Unfortunately this wasn't really available as an option up until around the end of last year. Futarchies need a bit more application work before a decentralized, scalable option is available, but technically is viable.
With this being said, why aren't we using them? I mean this in a sense of the people in this mailing list. I certainly love the discussion, but we now have a cheap way to aggregate information and collect funds. We can completely run a DAO and actually speed up the actions this group does, rather than shooting emails back and forth. Ideas are great, but actions are far more tenable.
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