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Futarchy is the most promising experiment in on-chain governance. Other DAO models (i.e., token voting or committee structures) may be simpler, but they’ve shown clear, consistent flaws. Paired with the right legal structure, futarchy offers a strong model for tokens as direct tools to own crypto-native businesses.

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Why not token voting?

Unlike pure token voting (which often drifts toward apathy, vote-buying, and short-termism), futarchy uses decision markets to price the expected impact of a proposal. Traders back the version of reality they believe will create more value, and the market surface area makes it harder for a few large holders to force outcomes that the broader market disagrees with.

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How decision markets work

Decision markets on star run as conditional markets pegged against your token and key KPIs. Two markets are created for every proposal (e.g., “spend $100K on acquisition” vs. “do not spend”), each collateralized with your token and settling against on-chain price data. The branch whose market clears at the higher price executes, meaning governance follows the path that the market believes will maximize long-term token value.

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Proposal quality and scope

To minimize noise and spam, creating a proposal requires staking a minimum amount of the protocol token and meeting clear criteria; this ensures proposers have skin in the game and that markets concentrate on high-signal decisions. Proposals are scoped to high-impact actions such as large treasury spends or additional token minting—day-to-day operations stay out of governance to keep focus on material decisions.

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Treasury and allowances

Each team gets its own treasury with a programmed monthly allowance. That allowance can be updated via successful futarchy proposals, so long-term resource planning happens in the open and aligns with tokenholder incentives.

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How does it work?

Founders can utilize futarchy as an ownership model on star, made possible via partnership with Combinator.
  • Fundraises happen on star. We work with teams to define starting monthly allowances (adjustable later via proposals) and the legal structure that grants futarchic governance over the protocol and IP.
  • After each raise, tokens are minted and liquidity is transferred to Combinator’s AMM to create the LP and team treasury. Mint authority, treasury transactions, LP control, and protocol/IP rights will sit under futarchic control.
  • Decision markets will be created and traded via Combinator’s platform, soon to be integrated into the star UI.