*A key difference is that forecasters in Optimism’s Futarchy Grants Contest won’t deposit real money, so there is no real loss to users. Rather, forecasters will use PLAY tokens. The amount of PLAY tokens a forecaster receives is tied to reputation via OP attestations, and top forecasters (based on PLAY token winnings) will be eligible for OP rewards.
TL; DR: Optimism is experimenting with Futarchy during Season 7 to test new ways to more effectively make grant allocation decisions. Anyone with a Farcaster and Telegram account is encouraged to participate as a forecaster by signing up here.
- All forecasters will have the opportunity to influence additional grant decisions
- Optimism governance contributors with OP attestions (including Citizens, Top 100 Delegates, Council and Committee members, Retro Funding Guest Voters, and NumbaNERDs) are eligible for higher amounts of PLAY tokens (voting power)
- Top forecasters will receive OP rewards and will be highlighted on a public leaderboard in June, once we’ve measured the impact (increase in Superchain TVL) generated by projects
Futarchy: What and Why?
- To recap, futarchy is a form of government proposed by economist Robin Hanson where prediction markets (more precisely, decision markets) are used to determine which policies will have the most positive effect.
- Decision markets are similar to prediction markets but rather than simply predicting whether an event happens they directly decide what happens.
Historically, making grants decisions or other predictions has been difficult for DAOs. Current approaches such as Council structures are less scalable, less transparent, and more centralized, so at Optimism we we’re exploring more effective approaches to making predictive governance decisions.
- Futarchy is said to lead to more accurate decisions by incentivizing accuracy: When decision-makers are held accountable for decisions (i.e., they are rewarded for accurate decisions and penalized for inaccurate decisions) this should incentivize thoughtful, rather than random or biased, decisions.
- In addition, a permissionless futarchy model encourages broader participation — wisdom of the crowds — rather than, say, a centralized and closed decision-making body.
Optimism’s Futarchy Experiment: Grants Allocation