In this episode, we sit down with Vaughn McKenzie-Landell to explore how market-driven decision-making can transform DAO governance. Vaughn is CEO & co-founder of Butter, who are bringing Information Finance to Ethereum — starting with Futarchy. He started his career at Dow Jones but exited TradFi after a google search in 2009 delivered him into the BitcoinTalk forum.
Together, we break down Butter’s evolution from simple delegate-payments to more complex schemes like proposal auctions and peer prediction, with each iteration teaching valuable lessons. We dig into their latest futarchy experiments – for example, running market-based grant allocations for Optimism’s ecosystem and for the Uniswap Foundation – where clear objectives (like growing total value locked) were set and participants bet on which projects would best achieve them.
Along the way we cover practical challenges: choosing objective metrics (often ROI), incentivizing honest participation, and even regulatory hurdles. Finally, we consider what this all means for the broader DAO space: futarchy seems well-suited to big funding decisions with measurable outcomes, while simpler proposals may still be handled by more traditional votes.
The episode wraps up by highlighting how continual experimentation – a bit of a “kaizen” (改善 - a Japanese term meaning continuous improvement (“kai” = change, “zen” = good) mindset – is shaping a more innovative, resilient future for decentralized governance and capital allocation.
Timestamps
00:00 Introduction to Governance Futures Podcast
04:13 Exploring Futarchy and Its Applications
11:00 Governance Challenges and Information Problems
12:59 Understanding Futarchy in Simple Terms
18:55 The Evolution of Butter and Initial Experiments
26:52 Misconceptions About Futarchy and Prediction Markets 33:40 Concrete Experiments and Their Outcomes
55:30 Future of Governance and Futarchy Models
01:00:22 Navigating Regulatory Challenges in Crypto
01:09:53 Quiz and Closing Remarks