Why does futarchy matter? Because early-stage crypto companies operate in a world where subjectivity is prevalent, ownership is freely tradable, and going from zero to one is the name of the game. Traditional governance models often fall short in this environment. @glxyresearch's @ZackPokorny_ breaks down why futarchy offers a clearer North Star 🧵

For teams: ▪️ How do you cultivate a committed holder base that won’t dump tokens at the first sign of turbulence? ▪️ How do you stay nimble and make fast, informed decisions?

For investors: ▪️ How do you assign value to an early-stage project with no revenue or user traction and liquid, freely tradable ownership? Traditional tools like DCFs and revenue multiples are difficult to apply. Valuation becomes more like venture investing, anchored in perception and conviction.

These aren’t new problems. But in crypto, the decentralized nature of DAOs enables novel fixes. Futarchy, a market-based governance model, offers: ▪️ Economic signal for builders ▪️ Minimized ambiguity in token holder sentiment ▪️ A conviction-weighted cap table

Futarchy doesn’t eliminate subjectivity. It plugs into it, letting anyone express belief in a proposal by trading DAO tokens in pass/fail markets. This turns individual conviction into a market signal that the DAO can act on.

It helps DAOs build a holder base defined by belief-weighted exposure where influence concentrates among those who’ve repeatedly demonstrated conviction in the DAO’s direction. Over time, ownership flows to the most aligned participants.

Futarchy doesn’t guarantee success. No governance system can do that. But it can give DAOs a stronger chance of success than what is afforded by traditional alternatives.