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# System prepended metadata

title: Put your money where your mouth is

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# Put your money where your mouth is

## What is futarchy?

Alright, imagine you're at school, and there's this big decision to be made, like choosing between having a pizza day every week or upgrading the school's computers. Everyone has an opinion, but how do you decide what's actually best for the school? This is where futarchy comes in, but with a twist.

Think of futarchy like a game where instead of just voting for what you want (like in normal democracy), everyone bets on what they think will make the school better based on a specific goal, say improving student happiness or grades. So, it's like if you and your friends put your lunch money on whether pizza day or new computers will make everyone happier or get better grades.

Here's how it works, using metaphors:
- **Setting the Goal**: The school sets a clear goal, like "increase average test scores" or "improve student satisfaction." This goal is like the finish line in a race; everyone knows where they're supposed to be heading.
- **Making Bets**: Instead of voting, imagine everyone uses virtual money to bet on which decision (pizza day or new computers) they believe will best achieve the goal. It's like fantasy football or a video game where you use strategy and your understanding of the game (in this case, the school's needs) to make your picks.
- **Watching the Outcomes**: Just like in a race, we have to wait and see which decision actually gets us to the goal. If the school chooses pizza day and test scores go up (or student satisfaction improves), then everyone who bet on pizza day wins. If the school chooses new computers and that works better, the computer bettors win.
- **Rewarding the Winners**: The winners get more virtual money or points, kind of like scoring points in a game. This encourages everyone to really think about what's best for the school, not just what they personally want, because they gain more if they bet wisely.
- **Learning and Adapting**: Over time, the people who are really good at predicting what's best for the school end up having more influence because they've won more virtual money. It's like leveling up in a game; the better you are, the more your choices matter.

Why might futarchy be better than other forms of governance? Well, in traditional voting, people might vote based on what they want personally, not necessarily what's best for everyone. In futarchy, because you're betting on outcomes, there's a push to really consider what will actually achieve the goals. It's like having a class project where the grade is based on results, not just effort; it encourages everyone to really focus on what works.

In summary, futarchy tries to use the wisdom of crowds in a more focused way by tying decisions to specific goals and rewarding those who are best at predicting what actions will meet those goals. It's a blend of democracy and market principles, aiming to make governance more efficient and effective. Like any system, it has its challenges (like setting clear, measurable goals and ensuring the betting market is fair), but the idea is to leverage collective intelligence and incentivize decisions that are truly in everyone's best interest.

## TheMetaDAO

Now that we have a better understanding of futarchy, let's delve into my personal experience with TheMetaDAO, focusing on my participation in one of its proposals. To give you a clear and detailed journey through my actions and decisions, I've taken screenshots at each step. This will allow you to visually follow along with my process, from the initial exploration of proposals to the final outcome of my participation. Through these visuals, you'll gain insight into the practical application of futarchy within TheMetaDAO and see firsthand how individual members can influence decisions and contribute to the collective governance of the platform. Join me as we navigate through this intriguing process together.

### Home Page
Welcome to TheMetaDAO.org! This is the gateway to our decentralized application (dApp), where you can dive into the world of governance proposals. Whether you're looking to explore upcoming proposals marked as pending or delve into the archive of expired ones, clicking on the app link will set you on your path. Engage with the proposals to shape the future of our DAO.
![Screenshot 2024-02-19 124537](https://hackmd.io/_uploads/SJCKqDGn6.png)

### Proposal Collection
Navigate through our proposals, categorized into 'Past Proposals' and 'Futures.' Futures are proposals currently awaiting decision, tagged as pending, while Past Proposals have reached their conclusion, marked either as 'Failed' or 'Succeeded.' This organization helps you easily find and engage with the proposals most relevant to you.
![Screenshot 2024-02-19 124409](https://hackmd.io/_uploads/BJes5wfha.png)

### Proposal Market
Selecting a proposal will take you to its Market Page, where you can view the Time-Weighted Average Price (TWAP) for both the pass and fail markets. This financial metric gives you insight into the proposal's current standing, helping inform your decision to support or oppose it.
![Screenshot 2024-02-19 124655](https://hackmd.io/_uploads/ByOTcwGh6.png)

### Proposal Details
Curious about the specifics of a proposal? Click the 'See More' link to access detailed information about it. Here, you can thoroughly understand the proposal's aims and implications, enabling you to make an informed decision on whether you believe it should pass or fail.
![Screenshot 2024-02-19 205356](https://hackmd.io/_uploads/H1wejvM36.png)

### Minting Pass and Fail tokens
To participate in a proposal, you'll need at least 1 META token. On the left-hand side, you can use your META tokens to mint an equal amount of pMETA (for the pass market) and fMETA (for the fail market). For instance, spending 2 META tokens will grant you 2 pMETA and 2 fMETA. Use pMETA to support proposals in the pass market and fMETA to back them in the fail market.
![Screenshot 2024-02-19 124727](https://hackmd.io/_uploads/BJLIswM3T.png)

Here's what happens after you mint: If you mint 1 META token, you'll receive 1pMETA and 1fMETA. This page shows your new token balances, ready for you to participate in proposal markets.
![Screenshot 2024-02-19 124826](https://hackmd.io/_uploads/Sy6_svzh6.png)

### Voting in markets
This example demonstrates opting against a proposal by selling your pMETA tokens. Below the market section, the 'Open Order' tab will display your active sell order, indicating your current position in the pass market.
![Screenshot 2024-02-19 130336](https://hackmd.io/_uploads/SkcaowG2T.png)

After your order is settled, you'll see the outcomes reflected in your balances. With 1pMETA spent and none remaining, your balance will include 720 $pUSDC. If the proposal fails, you'll regain 1 META token from your fMETA. Conversely, if the proposal passes, the 720 $pUSDC will convert into 720 USDC. This shows the final standing of your participation and investment in the proposal's outcome.
![Screenshot 2024-02-19 144401](https://hackmd.io/_uploads/rJwlhPf3p.png)

### Waiting Period
As we enter the waiting period for the proposal's conclusion, it's been approximately one day since casting our votes. During this time, we've observed the market dynamics closely, noting how the prices within both the pass and fail markets have started to converge. With two more days remaining until the end of the proposal, anticipation builds. This phase is critical, as it reflects the collective sentiment and speculation of all participants, offering us a real-time glimpse into the community's expectations and predictions regarding the outcome. Let's stay tuned, keeping an eye on the evolving market prices, as we patiently await the final results.
![image](https://hackmd.io/_uploads/Skxj3vz3p.png)

### Results
After a period of eager anticipation, we revisit TheMetaDAO page and find that the proposal in question is now marked as failed. By selecting this proposal for a closer look, we're presented with the Time-Weighted Average Price (TWAP) for both the fail and pass markets. Observing that the fail market TWAP is higher serves as a clear indicator that the fail market has prevailed. This outcome suggests that the collective wisdom and speculation of the participants leaned towards not implementing the proposal, as reflected in the market dynamics. The higher TWAP in the fail market signifies a stronger consensus or belief among the participants that the proposal should not pass, leading to its eventual designation as failed. This process underscores the unique and participatory nature of decision-making within TheMetaDAO, where market signals and member engagement directly influence the outcomes of governance proposals.
![image](https://hackmd.io/_uploads/S1n963Sna.png)


With the proposal now officially marked as failed, a new **Redeem** button has made its appearance on the left-hand side of the interface. Our next step is to click this button to claim back the 1 META token we committed. This moment is crucial for a couple of reasons, especially when considering the current financial implications.

Let's break down the situation:

The price of META token stands at approximately $900 at the moment.
During the voting process, we made a strategic move by selling our pMETA for 720 pUSDC, while retaining our 1 fMETA.
With the fail market prevailing, our expectation is to redeem our 1 fMETA for 1 META token, now valued at about $900.
This sequence of actions places us in a favorable position, financially speaking. The profit arises from participating in the winning side of the market—the fail market, in this case. By aligning our vote with the market that ultimately won, not only were we part of the collective decision-making process but also positioned ourselves to benefit from the market's dynamics. This outcome exemplifies the strategic aspect of participating in DAO governance, where informed decisions can lead to financial gain, highlighting the interconnectedness of governance, market speculation, and financial outcomes within TheMetaDAO ecosystem.
![image](https://hackmd.io/_uploads/S1NSJaHhp.png)

### Redeeming

Pressing the Redeem button initiates a crucial step in the process, crafting a transaction that our wallet then presents. This transaction breakdown is not just a formality; it's a moment of confirmation and clarity. It details the token transfers about to take place, serving as a tangible bridge between our actions within TheMetaDAO and the expected outcomes of those actions.

This breakdown is particularly significant because it confirms our expectations: the redemption of 1 META token back into our possession. It's a moment that encapsulates the fruition of our participation in the DAO's governance process, validating our strategic decision-making. The transaction, once confirmed, not only finalizes our engagement with this specific proposal but also illustrates the direct impact of TheMetaDAO's futarchy-based governance on individual participants. Through this, we see the blend of governance participation and financial strategy come full circle, emphasizing the innovative and interactive nature of participating in a decentralized autonomous organization like TheMetaDAO.
![image](https://hackmd.io/_uploads/HyTtJTr2p.png)

## Conclusion
In this exploration of TheMetaDAO, we've journeyed through the intricate process of participating in a proposal, leveraging the futarchy-based governance model to make informed decisions that not only contribute to the collective direction of the DAO but also offer potential financial benefits. From the initial engagement with the proposal, through the strategic voting and market participation, to the final act of redemption, each step has been a testament to the power and potential of decentralized governance.

The process highlighted the importance of understanding market dynamics and the strategic significance of voting in alignment with the predicted outcome. Our experience culminated in the redemption of the META token, a satisfying conclusion that not only confirmed our expectations but also underscored the financial acumen required to navigate the DAO's ecosystem successfully.

As we reflect on this journey, it's clear that TheMetaDAO and platforms like it represent a significant evolution in how decisions can be made within communities, blending financial strategy with governance in a way that empowers its members. This exploration has not just been about understanding a single proposal within TheMetaDAO but about appreciating the broader implications of futarchy as a governance model for decentralized organizations. The successful redemption of our META token, resulting in a profit due to our strategic participation, serves as a compelling example of the benefits that such a system offers to those willing to engage deeply with its mechanisms.

In conclusion, TheMetaDAO's utilization of futarchy invites us into a future where governance is transparent, participatory, and directly tied to the economic stakes of its decisions. It stands as a promising model for other DAOs and organizations seeking innovative ways to democratize decision-making and align collective actions with the shared economic interests of their members. As decentralized platforms continue to evolve, the lessons learned and the strategies developed within these ecosystems will undoubtedly influence broader discussions about governance, community, and the role of economics in collaborative decision-making.
