e761ca0c89
- Source: inbox/archive/2024-01-24-futardio-proposal-develop-amm-program-for-futarchy.md - Domain: internet-finance - Extracted by: headless extraction cron (worker 6) Pentagon-Agent: Rio <HEADLESS>
74 lines
3.3 KiB
Markdown
74 lines
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 conditional markets with AMM architecture to improve liquidity and reduce state rent costs"
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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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team: "joebuild (program), 0xNalloK (frontend), TBD (review)"
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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 migrate MetaDAO's futarchy implementation from Central Limit Order Books (CLOBs) to Automated Market Makers (AMMs) to address three structural problems: liquidity fragmentation from wide bid-ask spreads, manipulation vulnerability through midpoint pushing and wash trading, and state rent costs of 3.75 SOL per market pair.
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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 completion (1,200 META total)
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- **Timeline:** 3 weeks development + 1 week review
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## Proposal Details
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**Problem Statement:**
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1. Lack of liquidity: Wide valuation uncertainty discourages limit orders near midpoint
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2. Manipulation susceptibility: 1 META can push midpoint; VWAP vulnerable to wash trading
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3. State rent costs: 3.75 SOL per market pair = 135-225 SOL annually ($11,475-$19,125)
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**Solution:**
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- AMM with liquidity-weighted price metric (more liquidity = more weight to current price)
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- High fees (3-5%) to incentivize LPs and deter wash trading
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- Proposers lock initial liquidity and set starting pass/fail prices
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- Near-zero state rent costs
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**Implementation Scope:**
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- Write basic AMM tracking liquidity-weighted average price
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- Integrate AMM into autocrat + conditional vault
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- Feature to pause swaps and return positions after verdict
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- Feature to 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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**Team:**
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- joebuild: program development
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- 0xNalloK: frontend integration
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- TBD: expert review
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## Significance
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First major architectural change to MetaDAO's futarchy implementation since launch. The migration from CLOBs to AMMs represents a fundamental shift in how conditional markets operate - from discrete order books to continuous pricing curves. The proposal explicitly prioritizes liquidity and manipulation resistance over features like one-sided liquidity provision.
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The state rent economics are notable: at 3-5 proposals/month, CLOB costs compound to $11K-$19K annually, making AMMs economically necessary at scale.
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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]] - implementation being modified
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- [[futarchy adoption faces friction from token price psychology proposal complexity and liquidity requirements]] - addresses liquidity friction
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