---
type: claim
domain: internet-finance
description: "Dean's List ThailandDAO proposal failed despite 16x projected FDV increase suggesting mechanism friction not valuation disagreement"
confidence: experimental
source: "Futardio proposal DgXa6gy7nAFFWe8VDkiReQYhqe1JSYQCJWUBV8Mm6aM, 2024-06-22"
created: 2026-03-11
depends_on: ["MetaDAOs Autocrat program implements futarchy through conditional token markets where proposals create parallel pass and fail universes settled by time-weighted average price over a three-day window", "futarchy adoption faces friction from token price psychology proposal complexity and liquidity requirements"]
---

# Futarchy proposals with favorable economics can fail due to participation friction not market disagreement

The Dean's List DAO ThailandDAO event promotion proposal failed despite projecting a 16x FDV increase (from $123,263 to $2M+) with only $15K in costs and a 3% TWAP threshold. The proposal's own financial analysis showed the required 3% increase was "small compared to the projected FDV increase" and that the $73.95 per-participant value creation needed was "achievable." Yet the proposal failed to attract sufficient trading volume to pass.

This failure pattern suggests futarchy markets can reject proposals not because traders disagree with the valuation thesis, but because:

1. **Liquidity bootstrapping costs exceed expected returns** — Even when a proposal shows positive expected value, the capital and attention required to establish liquid conditional markets may exceed what individual traders can capture

2. **Proposal complexity creates evaluation friction** — The ThailandDAO proposal included token lockup mechanics, governance power calculations, leaderboard dynamics, and multi-phase rollout plans that increase the cognitive cost of forming a trading position

3. **Small DAOs face cold-start problems** — With Dean's List FDV at $123K, the absolute dollar amounts at stake may be too small to attract professional traders even when percentage returns are attractive

This is distinct from [[MetaDAOs futarchy implementation shows limited trading volume in uncontested decisions]] because this proposal was contested (it failed) but still showed low participation. The market didn't actively reject the proposal through heavy fail-side trading — it failed to engage at all.

## Evidence

- Dean's List DAO current FDV: $123,263 (2024-06-22)
- Proposal budget: $15K total ($10K travel, $5K events)
- Required TWAP increase: 3% ($3,698 absolute)
- Projected FDV: $2M+ (16x increase)
- Proposal status: Failed (2024-06-25)
- Trading period: 3 days
- Autocrat version: 0.3

The proposal explicitly calculated that only $73.95 in value creation per participant (50 participants) was needed to hit the 3% threshold, yet failed to attract sufficient trading interest.

## Challenges

Single-case evidence limits generalizability. The failure could be specific to:
- Dean's List DAO's small size and limited liquidity
- The proposal's specific structure (event promotion vs. treasury/technical decisions)
- Timing or market conditions during the 3-day trading window

However, this case provides concrete evidence that [[futarchy adoption faces friction from token price psychology proposal complexity and liquidity requirements]] operates even when the economics appear favorable.

---

Relevant Notes:
- [[MetaDAOs futarchy implementation shows limited trading volume in uncontested decisions]]
- [[futarchy adoption faces friction from token price psychology proposal complexity and liquidity requirements]]
- [[MetaDAOs Autocrat program implements futarchy through conditional token markets where proposals create parallel pass and fail universes settled by time-weighted average price over a three-day window]]

Topics:
- domains/internet-finance/_map
- core/mechanisms/_map