# Idea: Yield Governance

**URL:** <https://gov.yearn.fi/t/idea-yield-governance/911>\
**Category:** General Chat\
**Created:** [26 July 2020 00:51 UTC](https://gov.yearn.fi/t/idea-yield-governance/911 "2020-07-26T00:51:15Z")\
**Posts on this page:** 1\
**Showing post:** 6

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**Author:** ![zirs3d](https://avatars.discourse-cdn.com/v4/letter/z/c5a1d2/32.png) [@zirs3d](https://gov.yearn.fi/u/zirs3d)\
**Post date:** [27 July 2020 10:41 UTC](https://gov.yearn.fi/t/idea-yield-governance/911/6 "2020-07-27T10:41:56Z")

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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](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](https://en.wikipedia.org/wiki/Liquid_democracy) and [holacracy](https://en.wikipedia.org/wiki/Holacracy)

> **[An Introduction to Futarchy | Ethereum Foundation Blog](https://blog.ethereum.org/2014/08/21/introduction-futarchy)**

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](http://gov.yearn.fi/t/yip-14-yearn-rewards-reserve/136/40)

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