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docs/futarchy/eli5.md

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description: A simple description of futarchy
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# ELI5
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Futarchy is a fundamentally new mechanism. Because of this, it normally takes some time to fully understand how it works.
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A basic way to think about futarchy is:
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1. Proposals are raised to a DAO 
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2. People speculate on whether the proposal would make the DAO's token go up
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At a high-level though, a basic way to think about futarchy is:
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When the market thinks that the proposal would increase the value of the token, the proposal passes
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1. When proposals are raised to a DAO, people speculate on whether the proposal would make the DAO's token go up
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2. When the market thinks that the proposal would increase the value of the token, the proposal passes
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3. When the market thinks that the proposal would decrease the value of the token, the proposal fails
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When the market thinks that the proposal would decrease the value of the token, the proposal fails

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