I reasonate with this statement of how betting markets would engender ‘skin in the game’; we seen how fines/penalties can have an effect on voters turnout.
…elected representatives would formally define and manage an after-the-fact measurement of national welfare, while market speculators would say which policies they expect to raise national welfare
Intially proposed by: Robin Hanson
https://mason.gmu.edu/~rhanson/futarchy.html
Also prediction markets might approximate this expectancy:
When a betting market clearly estimates that a proposed policy would increase expected national welfare, that proposal becomes law.
Vitalik wrote a short post, along with arguments for/against the futarchy goverance model:
As an example on that two-folds:
First, voting on values: individuals / elected representatives via delegation; would instead vote on the appropriate success metric TVL, APY etc. only, along with an appropriate maturity date.
Then, betting on beliefs: prediction markets pick policies that best optimize the success metric within the betting window.
The wrong side gets trades reverted, while correct trades gets rewarded on maturity.
Also worth mentioning liquid democracy and holacracy
See Absolutes and differentials
on the main blog post by Vitalik, who surmised that futarchy is likely to work well for large-scale decisions, but less so for finer-grained tasks
…a hybrid system may work better, where a futarchy decides on a political party every few months and that political party makes decisions.
Referencing this post on YIP 14: yEarn Rewards Reserve - #40 by zirs3d