1c46452fdd
Pipeline auto-fixer: removed [[ ]] brackets from links that don't resolve to existing claims in the knowledge base.
60 lines
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3.3 KiB
Markdown
60 lines
No EOL
3.3 KiB
Markdown
---
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type: entity
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entity_type: decision_market
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name: "MetaDAO: Develop AMM Program for Futarchy?"
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domain: internet-finance
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status: passed
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parent_entity: "[[metadao]]"
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platform: "futardio"
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proposer: "joebuild"
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proposal_url: "https://www.futard.io/proposal/CF9QUBS251FnNGZHLJ4WbB2CVRi5BtqJbCqMi47NX1PG"
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proposal_date: 2024-01-24
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resolution_date: 2024-01-29
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category: "mechanism"
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summary: "Proposal to replace CLOB-based futarchy markets with AMM implementation to improve liquidity and reduce state rent costs"
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tracked_by: rio
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created: 2026-03-11
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---
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# MetaDAO: Develop AMM Program for Futarchy?
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## Summary
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Proposal to develop an Automated Market Maker (AMM) program to replace the existing Central Limit Order Book (CLOB) implementation in MetaDAO's futarchy system. The AMM would use liquidity-weighted price over time as the settlement metric, charge 3-5% swap fees to discourage manipulation and incentivize LPs, and reduce state rent costs from 135-225 SOL annually to near-zero.
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## Market Data
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- **Outcome:** Passed
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- **Proposer:** joebuild
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- **Created:** 2024-01-24
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- **Completed:** 2024-01-29
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- **Budget:** 400 META on passing, 800 META on completed migration
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- **Timeline:** 3 weeks development + 1 week review
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## Technical Scope
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**Program changes:**
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- Write basic AMM tracking liquidity-weighted average price over lifetime
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- Incorporate AMM into autocrat + conditional vault
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- Feature to permissionlessly pause AMM swaps and return positions after verdict
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- Feature to permissionlessly close AMMs and return state rent SOL
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- Loosen time restrictions on proposal creation (currently 50 slots)
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- Auto-revert to fail if proposal instructions don't execute after X days
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**Frontend integration:**
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- Majority of work by 0xNalloK
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- Mainnet testing on temporary subdomain before migration
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## Significance
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This represents a fundamental mechanism upgrade for MetaDAO's futarchy implementation, addressing three core problems with the CLOB approach:
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1. **Liquidity:** Wide bid/ask spreads and price uncertainty discouraged limit orders near midpoint
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2. **Manipulation resistance:** CLOBs allowed 1 META to move midpoint; VWAP vulnerable to wash trading
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3. **Economic sustainability:** 3.75 SOL state rent per market pair (135-225 SOL annually) vs near-zero for AMMs
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The proposal explicitly prioritizes simplicity and cost reduction over theoretical purity, noting that "switching to AMMs is not a perfect solution, but I do believe it is a major improvement over the current low-liquidity and somewhat noisy system."
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The liquidity-weighted pricing mechanism is novel in futarchy implementations—it weights price observations by available liquidity rather than using simple time-weighted averages, making manipulation expensive when liquidity is high.
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## Relationship to KB
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- metadao.md — core mechanism upgrade
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- [[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 evolution from TWAP to liquidity-weighted pricing
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- [[futarchy adoption faces friction from token price psychology proposal complexity and liquidity requirements]] — addresses liquidity barrier
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- [[futarchy is manipulation-resistant because attack attempts create profitable opportunities for defenders]] — implements explicit fee-based defender incentives |