---
description: Using token price as the futarchy objective elegantly aligns all holders and avoids the impossible task of specifying complex multi-dimensional goals
type: claim
domain: internet-finance
created: 2026-02-16
source: "Heavey, Futarchy as Trustless Joint Ownership (2024)"
confidence: likely
tradition: "futarchy, mechanism design, DAO governance"
related:
- Formal coordination mechanisms require shared narrative as prerequisite for valid objective function specification because the choice of what to optimize for is a narrative commitment the mechanism cannot make autonomously
- MetaDAO's coin-price objective function partially resolves the Rasmont selection-correlation critique by making the welfare metric endogenous to the market mechanism, while retaining macro-tailwind selection bias
reweave_edges:
- Formal coordination mechanisms require shared narrative as prerequisite for valid objective function specification because the choice of what to optimize for is a narrative commitment the mechanism cannot make autonomously|related|2026-04-18
- MetaDAO's coin-price objective function partially resolves the Rasmont selection-correlation critique by making the welfare metric endogenous to the market mechanism, while retaining macro-tailwind selection bias|related|2026-04-18
---

Vitalik Buterin once noted that "pure futarchy has proven difficult to introduce, because in practice objective functions are very difficult to define (it's not just coin price that people want!)." For asset futarchy governing valuable holdings, this objection misses the point. Coin price is not merely acceptable—it is the fairest and most elegant objective function, and probably the only acceptable one for DAOs holding valuable assets.

The elegance comes from alignment: every token holder, regardless of size, shares the same objective. Using coin price sidesteps the impossible problem of aggregating complex, multi-dimensional preferences into a single metric. It prevents the majority from defining "success" in ways that benefit them at minority expense—the market continuously arbitrates what "good for the token" actually means.

This clarity becomes crucial when combined with [[decision markets make majority theft unprofitable through conditional token arbitrage]]. The objective function must be something all holders genuinely share for the arbitrage protection to work. Any multi-dimensional objective creates room for majority holders to claim their preferred action serves some dimension while actually extracting value.

The contrast with other governance domains matters. For government policy futarchy, choosing objective functions remains genuinely difficult—citizens want fairness, prosperity, security, and other goods that trade off. But for asset futarchy, the shared financial interest provides natural alignment. This connects to [[ownership alignment turns network effects from extractive to generative]]—the simple, shared objective function is what enables the alignment.

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Relevant Notes:
- [[decision markets make majority theft unprofitable through conditional token arbitrage]] — mechanism that requires a shared objective to function
- [[ownership alignment turns network effects from extractive to generative]] — explains why aligned objectives matter for coordination
- [[token economics replacing management fees and carried interest creates natural meritocracy in investment governance]] — shows how aligned incentives reshape organizational behavior

Topics:
- [[maps/livingip overview]]