Market-based Governance
Public blockchains face challenges such as stakeholder alignment, funding, and upgradability due to their decentralized and open-source nature. The informal off-chain governance systems of open-source software aren’t well suited to manage this because of the large economic stakes that are involved and the coordination problems inherent in a decentralized network.
SX Network has unique solution to the age old problem of governance: the free market.
By utilizing the native SX prediction market to create one of the world’s first market-based governance systems (also known as Futarchy). This involves using a token voting system to determine objectives, and then using a prediction market to determine the optimal policy for achieving that objective.
By doing so, it prevents governance systems from political capture and replaces it with an objective, market-based system in which bettors with real skin-in-the-game, rather than politicians, make decisions. We will be publishing more research in the following weeks on our governance design.Market action decides whether a proposal passes or not. If it doesn’t pass, bets are void. If it does pass, bettors that bet on it win their bets if the settlement rule is achieved by the expiration date, and vice versa.
Last modified 6mo ago
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