In a DAO Democracy, how do we propose a bill, and how does it get adopted?
Initially, anyone can propose a bill. It can be submitted at any time. If the prediction market says it has a positive impact on the collective welfare, it is adopted. If not, it is not.
If the bill is adopted, it’s put into effect on the date proposed in the bill, which is typically the adoption date plus some period of time to allow implementation.
At any time, anyone can propose a new method of adopting a bill. It is evaluated and put into effect
using the existing methods.
In the United States, this mechanism would replace Congress. Given the current popularity of Congress,
any proposal that proposes to replace it will be given a more than fair hearing.
More specifically, how might we propose a bill?
Let anyone propose a bill. Assume the bill includes, as a necessary component, an effective date (which
is the adoption date plus time for implementation), and an implementation strategy, or the like. Bills
that fail to include such a provision are ill-formed and rejected. Once submitted, there are two
possibilities: either the bill is accepted, or the bill is rejected.
Create two conditional futures on the DCW (Democratic Collective Welfare) of the nation. In one
conditional future, the bill is assumed to have passed. In the other conditional future, the bill is assumed
to have not passed. In each conditional future, there will be some value for DCW: DCWpassed and DCWnot-
passed. If, for a period of 1 week, DCWpassed > DCWnot-passed then the bill is adopted, otherwise it is not.
Following the adoption date, one of the two conditional futures is based on a condition that is false.
That future market is terminated and all funds returned to the market participants. The other market,
which is based on a conditional which is true, continues. Payouts are made from this market based on
the actual outcomes that actually occur.
Notice that participants in the market are rewarded (make money) if they accurately forecast the actual
value of DCW. They are not “voting for” any particular outcome. A “biaser” who seeks to “bias” the
outcome by using the market to predict an incorrect outcome will become vulnerable to anyone who
wants to make a profit by correcting the market inefficiency the biaser is creating. That is, attempts to
bias the market are, in essence, attempts to create market inefficiencies. To the extent that market
inefficiencies can be removed from the system, bias can also be removed from the system. Deliberate attempts to bias the system for political reasons would, presumably, be a well-known motive and would
be watched for, as they would offer a profit opportunity to anyone who corrected the bias.