---
description: Unlike token-voting where 51 percent controls treasury, futarchy requires supporters to buy out opponents in Pass markets
type: claim
domain: mechanisms
created: 2026-02-16
source: "MetaDAO Launchpad"
confidence: likely
tradition: "futarchy, DAO governance, mechanism design"
---

Futarchy creates fundamentally different ownership dynamics than token-voting by requiring proposal supporters to buy out dissenters through conditional markets. When a proposal emerges that token holders oppose, they can sell in the Pass market, forcing supporters to purchase those tokens at market prices to achieve passage. This mechanism transforms governance from majority rule to continuous price discovery.

The contrast with token-voting is stark. Traditional DAO governance allows 51 percent of supply (often much less due to voter apathy) to do whatever they want with the treasury. Minority holders have no recourse except exit. In futarchy, there is no threshold where control becomes absolute. Every proposal requires supporters to put capital at risk by buying tokens from opponents who disagree.

This creates very different incentives for treasury management. Legacy ICOs failed because teams could extract value once they controlled governance. [[futarchy is manipulation-resistant because attack attempts create profitable opportunities for arbitrageurs]] applies to internal extraction as well as external attacks. Soft rugs become expensive because they trigger liquidation proposals that force defenders to buy out the extractors at favorable prices.

The mechanism enables genuine joint ownership because [[ownership alignment turns network effects from extractive to generative]]. When extraction attempts face economic opposition through conditional markets, growing the pie becomes more profitable than capturing existing value.

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Relevant Notes:
- [[futarchy is manipulation-resistant because attack attempts create profitable opportunities for arbitrageurs]] -- same defensive economic structure applies to internal governance
- [[ownership alignment turns network effects from extractive to generative]] -- buyout requirement enforces alignment
- [[Living Capital vehicles pair Living Agent domain expertise with futarchy-governed investment to direct capital toward crucial innovations]] -- uses this trustless ownership model

Topics:
- [[livingip overview]]