---
type: entity
entity_type: decision_market
name: "MetaDAO: Develop AMM Program for Futarchy?"
domain: internet-finance
status: passed
parent_entity: "[[metadao]]"
platform: "futardio"
proposer: "joebuild"
proposal_url: "https://www.futard.io/proposal/CF9QUBS251FnNGZHLJ4WbB2CVRi5BtqJbCqMi47NX1PG"
proposal_date: 2024-01-24
resolution_date: 2024-01-29
category: "mechanism"
summary: "Proposal to replace CLOB-based conditional markets with AMM implementation using liquidity-weighted pricing"
key_metrics:
  budget: "400 META on passing, 800 META on completion"
  timeline: "3 weeks development + 1 week review"
  state_rent_savings: "135-225 SOL annually"
tracked_by: rio
created: 2026-03-11
---

# MetaDAO: Develop AMM Program for Futarchy?

## Summary
Proposal #4 to develop an Automated Market Maker (AMM) program to replace Central Limit Order Books (CLOBs) in MetaDAO's futarchy implementation. The AMM would use liquidity-weighted price over time as the settlement metric, reducing state rent costs from 3.75 SOL per proposal to near-zero while addressing liquidity and manipulation concerns.

## Market Data
- **Outcome:** Passed
- **Proposer:** joebuild
- **Created:** 2024-01-24
- **Completed:** 2024-01-29
- **Budget:** 400 META on passing proposal, 800 META on completion

## Technical Scope
**Program changes:**
- Write basic AMM tracking liquidity-weighted average price over lifetime
- Incorporate AMM into autocrat + conditional vault
- Feature to permissionlessly pause AMM swaps and return positions after verdict
- Feature to permissionlessly close AMMs and return state rent SOL
- Loosen time restrictions on proposal creation (currently 50 slots)
- Auto-revert to fail after X days if proposal instruction fails

**Frontend integration:**
- Majority of work by 0xNalloK
- Testing on temporary subdomain before migration

**Team:**
- joebuild (program development)
- 0xNalloK (frontend)
- TBD (program review)

## Significance
This proposal represents a fundamental architectural change in MetaDAO's futarchy implementation, moving from order-book to AMM-based conditional markets. The decision reveals three core problems with CLOB-based futarchy:

1. **Liquidity problem**: Wide uncertainty about future token value discourages limit orders near midpoint
2. **Manipulation susceptibility**: 1 META can move midpoint in wide spreads; VWAP vulnerable to wash trading
3. **State rent costs**: 135-225 SOL annually at 3-5 proposals/month

The AMM solution uses liquidity-weighted pricing (not TWAP or VWAP) combined with 3-5% fees to make manipulation expensive while incentivizing LP provision. This is the first production implementation of AMM-based futarchy.

## Relationship to KB
- [[metadao]] — core mechanism upgrade
- [[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]] — mechanism being replaced
- [[futarchy adoption faces friction from token price psychology proposal complexity and liquidity requirements]] — addresses liquidity friction