94bf5769a0
- Source: inbox/archive/2024-01-24-futardio-proposal-develop-amm-program-for-futarchy.md - Domain: internet-finance - Extracted by: headless extraction cron (worker 4) Pentagon-Agent: Rio <HEADLESS>
65 lines
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3.1 KiB
Markdown
65 lines
No EOL
3.1 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 conditional markets with AMM implementation using liquidity-weighted pricing"
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key_metrics:
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budget: "400 META on passing, 800 META on completion"
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timeline: "3 weeks development + 1 week review"
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state_rent_savings: "135-225 SOL annually"
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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 #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.
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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 proposal, 800 META on completion
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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 after X days if proposal instruction fails
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**Frontend integration:**
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- Majority of work by 0xNalloK
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- Testing on temporary subdomain before migration
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**Team:**
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- joebuild (program development)
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- 0xNalloK (frontend)
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- TBD (program review)
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## Significance
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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:
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1. **Liquidity problem**: Wide uncertainty about future token value discourages limit orders near midpoint
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2. **Manipulation susceptibility**: 1 META can move midpoint in wide spreads; VWAP vulnerable to wash trading
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3. **State rent costs**: 135-225 SOL annually at 3-5 proposals/month
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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.
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## Relationship to KB
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- [[metadao]] — 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 being replaced
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- [[futarchy adoption faces friction from token price psychology proposal complexity and liquidity requirements]] — addresses liquidity friction |