Here’s my take after checking out the Cloud-0 proposal and how it plays out in the Futarchy DAO model.
The problem? Whales. It’s almost always the whales.
And they’re the reason Cloud-1 won’t pass.
Whales aren’t here for the project—they’re here for profit. Regular people buy $CLOUD because they believe staking will be good for it, which drives up demand and price. But whales? They just see an easy cash-out and dump their bags on voters, no matter what the proposal is. Honestly, if a proposal was super unpopular, they’d probably do the opposite—buy up cheap $CLOUD and wait for the next pump.
So how do we stop them from wrecking the system? I’ve got a couple of ideas:
delaying voting trades. Hold on the buying/selling made through the Futarchy until the end of the voting time. And make them all happen at at once. If the chart doesn’t move from votes , whales can’t predict what’s coming and take advantage of it. Simple.
Plus, if we want people to be honest when voting. It is better for them to not see any trend, or they will wait and see if the price moves up or down, and vote accordingly.
Or my favorite idea: Futarchy on $sCLOUD.
Instead of trading $CLOUD directly, people would stake it to get $sCLOUD (staked CLOUD).
Same for USDC—stake it to get $sUSD (staked USDC).
$sCLOUD would have its own separate price chart, totally independent from $CLOUD’s ups and downs. That way, only people who actually care about the project (and not just quick profits) would have a say in governance. No more bearish or bullish whales messing things up.
I think this could make the system way more fair and way harder to exploit. And votes would reflect the community sentiments. What do you think?
Hi Frangan, thank you for writing this, it’s definitely something to talk about.
Pausing trading would imo be impossible coz that would require coordinating with DEXed and CEXes, right?
I have been trying to figure out this “whale problem” ever since I first heard about DAO voting and participated in one. My current personal believe is that the only solution is to give everyone a single vote. Regardless of how many tokens one owns, stakes or can buy they will always have a single vote. Coz in physical world where each of us counts as an individual with a personal preference we are all just one individual with one vote.
But that’s just me. I am totally interested in hearing others perspectives.
I agree that there are material benefits of Futarchy on $sCLOUD. I don’t think we’d considered $sUSD before, but that’s pretty interesting too. The point would be that it would take a long time to exit the market, either way?
On the point of whales, I’ll say: whales are people too . If we want the value of CLOUD to increase, that requires respecting the opinion of both whales and minnows. After all, if the majority of people can transfer wealth from the whales to themselves, the whales have no incentive to hold the token
I’m OK with whales. But the fact that someone buying or selling on the market affects the proposal is a little ruinning the “jauge the sentiment” on a proposal.
If a whale doesn’t like a proposal, it is OK for them to buy or sell. As long as it is through the Futarchy website.
An additional note. Usdc are not unlimited for most the community, I personally had to sell some of my cloud to get usdc, so I could vote ^^’