Futarchy
Futarchy is a form of government proposed by economist Robin Hanson. It involves elected officials defining the measure of the nation's well-being and using prediction markets to determine which policies will have the most positive effects source.
In traditional Democracy, representatives elected through a process define and manage the welfare of the state. In Futarchy, the policies to be implemented to achieve the goals are determined by market speculators and participants source. The premise is that the Betting Market surpasses the expertise of specialists. Vitalik is known to have an affinity for prediction markets source. The ultimate goal is to "make x into y by z," which is voted on through traditional methods, while the policies are entrusted to market speculators source.
In Futarchy, instead of voting for means, as in traditional systems, Futarchy allows voting for goals. For example, a policy proposal could be "Provide a 10,000 yen subsidy to those with an annual income below XXX." This is a reasonable example of voting for goals source. The criteria (2% unemployment rate), duration, and field (unemployment rate in Singapore) are selected. A policy proposal, labeled as "X," is presented, and {Market 1} offers the price of "success", while {Market 2} presents the price of 'failure'. If {Market 1} exceeds the price before the market closes, the policy is implemented. At this point, transactions in {Market 2} are refunded. Those who supported the winning side based on their holdings in the policy's success receive rewards if the proposal is verified over time and has a real impact on the initial success by the specified deadline source.
This system brings several benefits to DAOs. It becomes difficult for executives managing funds to deceive organizations and society for short-term gains. Governance can become fundamentally open and transparent source.
This mechanism is known as Result Oracle source. It is understood as a means to maximize the liquidity of probabilistic rewards. It represents the "KPI setting and evaluation taken over by the Results Oracle" in the mechanism of Futarchy, where taxes are distributed to those who achieve KPIs for a certain policy, and those who invest in the winners also receive a share source. Here is a visual representation of the concept(https://gyazo.com/508bd8b6b92eb3609a2de41f44aa3716) source.
According to shogochiai, the mechanism of "Distribute Taxes to People Who Achieve KPIs for a Certain Policy, and Those Who Invest in the Winners Also Get a Share" is realized by Result Oracle source. Here is a tweet by shogochiai(https://twitter.com/shogochiai/status/1420121911225294849?ref_src=twsrc%5Etfw) source.
According to shogochiai, it would be beneficial to enable the production of Retroactive Public Goods Funding (Futarchy) Contracts like MISO and easily integrate the FeePool of any Dapp. They suggest that future Dapps should ultimately adopt the Futarchy token model, where governance tokens receive a portion of the fees while the Results Oracle makes decisions source. Here is another tweet by shogochiai(https://twitter.com/shogochiai/status/1420129780582674433?ref_src=twsrc%5Etfw) source.