I wanted to front this article with a slightly more informal framing to the main body of this post, to provide some context to what is happening at the moment in the DeFi space and where this project fits in.
finance.vote is a cryptoeconomic game that marries governance with the markets. The convergence of these two normally disparate, but complex concepts is, in my opinion is what has caused the recent DeFi boom.
And it is a boom. There are currently over a hundred new tokens a day flooding the market, thanks the newly realised permissionlessness of the token space afforded by usable decentralised exchanges.
Permissionlessness however, comes at a cost. Many of these new projects are badly rigged games, early gestation fringe research projects, pseudo ponzis or just outright scams.
In this noisy environment, signalling of quality projects becomes more expensive. Even if you can manage the noise, your months of design and engineering work can get forked from underneath you with juicier, albeit more temporary incentives. The result is a fork bonanza, some of which are almost certainly going to zero.
Some of these projects, however, are genuinely interesting new financial primitives, that are not just decentralising money, but now finance. It’s early, but there is enough going on in the space to warrant serious interest.
Whether you’re yield farming, playing with an elastic supply cryptocurrency, or mining bitcoin you are playing a cryptoeconomic game. Some of these may turn out to be features of central bank digital currencies, some of them are a recipe for getting rekt.
finance.vote is a consensus system designed for discovering which of these games are worth your time. It is designed to find signal in the noise and provide you with market alpha. The key to success in the markets.
In the interest of transparency, I want to lay out the rules of the first phase of the game out in the open, so that players can be informed about their choice to play.
Asymmetry in DeFi should be eliminated as much as possible.
I have found the smartest people I can find to talk about this project and they each see something slightly different in it. Some have called it “spread betting on the crypto markets,” “vote based derivatives”, “using the wisdom of the crowds to filter out quality,” or my favourite “a decentralised shitcoin sieve.”
What this project becomes over time will be determined by the coin holders, vote markets are just the beginning.
finance.vote begins life as a prediction market system like Augur, but with token economics that guarantees liquidity. More broadly, it is a dynamic governance architecture that aims to take crypto governance into new and interesting territories.
The system will mature into something I’m calling second layer governance. A debating system that will allow users to aggregate influence on their favourite crypto networks. It will utilise the Decentralised Monetary Fund (the DMF) our main DAO, to manage the monetary policy and utilise $FIN as a governance token both in this system and beyond it.
You’ll be able to reach consensus in group sizes of your choosing and trustlessly trade the assets that are worth holding, as well as participate and be rewarded for sharing market alpha.
Social consensus systems are the true game-changer in crypto.
Nick, CEO finance.vote
The finance.vote cryptoeconomic game
finance.vote begins as a decentralised voting based prediction market game. If you vote correctly on future market moves, you win money.
The game aims to bring social consensus to market ordering. In order to play, you are required to burn some of the system’s utility token $FIN to start your journey in the finance.vote ecosystem (100 $FIN to start, variable in the future). This is a sybil protection mechanism, a key component of decentralised voting systems.
For that, you get an identity which gives you voting rights within the system. Then you can vote in our voting markets. If you vote correctly, you gain more voting power. And voting is all about power.
The voting system is based on quadratic voting, which broadens the parameter space of voting away from your typical yes / no binary voting, or the plutocratic one coin, one vote system.
This voting module is used throughout the system and will gain complexity, but for now it’s pretty simple.
You have a budget of vote power $V. Every identity that takes part in a vote market will have the opportunity to spend these tokens on votes.
You vote on tokens from across the cryptospace. Depending on the market, you might be voting on whether you think a token will go up or down in price, on established tokens or new ones. There will be other metrics in the future. In fact, you will decide.
It’s quadratic voting, so that means voting has a non-linear cost. If you want to vote once on something, that’s 1 $V, five times it’s 25 $V. The $V cost is the square of the votes.
Your votes create a personalised market order of the tokens in the stack of tokens presented to you. This order will be matched against the true market order at the end of the round.
If you’re correct you win more $V to spend in the next round. The result, is that voting power aggregates to the correct. This is an entirely meritocratic system.
Along with additional voting power, depending on the amount of $V you spent on your winning vote. You will obtain a share of a reward pool. The reward pool, which is contained with the vote market contract starts at 100,000 $FIN.
The sum of the total reward pools is the inflationary dynamic to the crypto economy.
If you wish to add an additional stake to your bet, you can do so by staking $FIN to your vote. If you do this, you will win the reward pool share /and/ a share of the staking pool. 10% of the staked $FIN is burned in every round.
Turning Degens into Alpha
The aggregated consensus of these games will pool the collective intelligence of the players.
There’s simply too much going on in this space to properly DYOR on everything. So we’re collectivising this research into an aggregated perception of what people think will succeed.
This will provide market alpha. The additional delta above just holding the assets in question. In other words, gains.
Our goal is to use collective intelligence to get a read on the future of these markets.
We’re not expecting this to be accurate in the first rounds. But as voting power aggregates to the repeatedly correct our hypothesis is, that this will change.
Rounds will start at one week. Which means you have a week to make your bet and a week to see what the results are. New rounds start every Sunday close.
How to Play
At some point in the near future. Our first vote will be launched. Shortly before, there will be a small public sale of our tokens. Full details of the raise and token economics will follow in due course.
In this listing event, you will be able to obtain $FIN from either this sale or from uniswap to set up an identity and start playing.
After that, your identity will have free $V to vote in every market in the system.
Those are the rules of the game. Play or don’t play, it’s up to you.