Futarchy is a form of government proposed by economist Robin Hanson, in which elected officials define measures of national wellbeing, and prediction markets are used to determine which policies will have the most positive effect. It was named by The New York Times as a buzzword of 2008. The idea has been subsequently expanded to explore its potential in the context of blockchains and the decentralized autonomous organization (DAO). The term "futarchy" is a portmanteau of "future" and "anarchy," reflecting its use of market predictions to guide decision-making without traditional hierarchical
Futarchy is a form of government proposed by economist Robin Hanson, in which elected officials define measures of national wellbeing, and prediction markets are used to determine which policies will have the most positive effect. It was named by The New York Times as a buzzword of 2008. The idea has been subsequently expanded to explore its potential in the context of blockchains and the decentralized autonomous organization (DAO). The term "futarchy" is a portmanteau of "future" and "anarchy," reflecting its use of market predictions to guide decision-making without traditional hierarchical authority.
==History== The concept of futarchy builds on earlier ideas in prediction markets and decision-making. Robin Hanson first explored related concepts in his 1999 paper "Decision Markets," which proposed using speculative markets to estimate the consequences of policy decisions, such as the impact of concealed carry laws on murder rates. In 2000, Hanson formalized futarchy in "Futarchy: Vote Values, But Bet Beliefs," introducing the slogan "vote on values, bet on beliefs" and outlining a system where democracy defines welfare metrics, but markets select policies to maximize them. Hanson refined the idea in his 2013 paper "Shall We Vote on Values, But Bet on Beliefs?," addressing criticisms and proposing mechanisms like conditional markets and welfare measurements. The concept gained attention in blockchain contexts with Vitalik Buterin's 2014 blog post "An Introduction to Futarchy," which explored its application to decentralized governance in Ethereum-based DAOs. Buterin also discussed related ideas in his 2018 post on DAICOs, blending ICOs with DAO governance elements.
Discovered by embedding cosine similarity (sentence-transformers MiniLM, 384-dim).