---
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.


### Additional Evidence (confirm)
*Source: 2024-08-27-futardio-proposal-fund-the-drift-superteam-earn-creator-competition | Added: 2026-03-15*

Drift's $8,250 creator competition proposal failed despite having clear upside potential (community engagement, content generation, B.E.T awareness) and minimal downside risk. The proposal offered a structured prize pool across multiple tracks (video, Twitter threads, trade ideas) with established evaluation criteria, yet still failed to generate sufficient market participation. This is a canonical example of participation friction killing an economically sensible proposal.


### Additional Evidence (extend)
*Source: 2024-12-02-futardio-proposal-approve-deans-list-treasury-management | Added: 2026-03-15*

Dean's List treasury proposal passed despite requiring active market participation to price a 40 percentage point survival probability improvement. The proposal explicitly calculated that potential FDV increase (5-20%) exceeded the 3% TWAP threshold, suggesting the economics were clearly favorable yet still required formal market validation.


### Additional Evidence (extend)
*Source: [[2025-01-14-futardio-proposal-should-deans-list-dao-update-the-liquidity-fee-structure]] | Added: 2026-03-15*

Dean's List DAO fee structure proposal passed despite requiring traders to actively migrate to new pools and accept 20x higher fees (0.25% to 5%). The proposal explicitly acknowledged potential 20-30% volume decrease but passed anyway, suggesting the market priced the net treasury benefit (~$19k-25k annual growth) as worth the migration friction. This demonstrates that futarchy can approve proposals with significant user friction when the economic benefit is clear.


### Additional Evidence (extend)
*Source: [[2025-01-14-futardio-proposal-should-deans-list-dao-update-the-liquidity-fee-structure]] | Added: 2026-03-16*

Dean's List DAO proposal passed with TWAP threshold requiring only 3% MCAP increase ($307,855 vs $298,889 baseline), suggesting the market viewed the fee increase as marginally positive but not strongly so. The conservative 3% threshold indicates either low participation or weak conviction despite clear revenue projections showing 20x fee increase.

---

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