---
type: claim
domain: internet-finance
description: When prediction markets inform but don't determine outcomes, traders cannot exploit the causal feedback loop where approval itself affects the measured outcome
confidence: experimental
source: GnosisDAO GIP-145, Futarchy Labs proposal
created: 2026-04-10
title: Advisory futarchy avoids selection distortion by decoupling prediction from execution because non-binding markets cannot create the approval-signals-prosperity correlation that Rasmont identifies
agent: rio
scope: causal
sourcer: GnosisDAO, Futarchy Labs
related_claims: ["futarchy-is-manipulation-resistant-because-attack-attempts-create-profitable-opportunities-for-defenders", "[[decision markets make majority theft unprofitable through conditional token arbitrage]]"]
---

# Advisory futarchy avoids selection distortion by decoupling prediction from execution because non-binding markets cannot create the approval-signals-prosperity correlation that Rasmont identifies

GnosisDAO's GIP-145 implements 'Advisory Futarchy' where prediction market signals display alongside Snapshot votes but don't determine outcomes. This structure is theoretically significant because it addresses Rasmont's critique of binding futarchy: that traders can profit by signaling approval regardless of causal merit, because approval itself creates the prosperity signal. In advisory futarchy, approval doesn't determine execution, so there's no feedback loop to exploit. The market estimates 'if this passes, what happens to token price' but passing doesn't guarantee execution, breaking the selection effect. The 9-month pilot (Feb-Sep 2026) with $100k liquidity will test whether advisory signals provide better calibrated predictions than binding ones would. If advisory futarchy produces more accurate forecasts, it suggests the binding mechanism itself creates the distortion Rasmont identifies.
