Why Conditional Markets Will Replace Token Voting
Token voting is broken.
Not in theory. In practice. Every day, DAOs across the ecosystem are learning this the hard way: whale control, voter apathy, terrible decisions, and endless drama.
The problem isn't new. We've known for years that one-token-one-vote is a terrible way to make decisions. Robin Hanson proposed an alternative back in 2000: futarchy, or conditional markets. Price decisions instead of voting on them. Let markets find the best outcomes. It's been proven over 20+ years. But we didn't have the blockchain infrastructure to make it real. Until now.
Conditional markets—also called decision markets or futarchy—aren't an experiment anymore. They're proven. And they're about to become the standard for how communities actually make decisions.
Here's why.
The Governance Crisis Nobody's Talking About
Let's be honest about what token voting actually is: plutocracy with extra steps.
One token = one vote. Sounds fair. But it means whoever owns the most tokens decides. They don't have to understand the proposal. Their incentives don't have to align with the DAO's long-term health. Wallet size determines outcomes.
And it gets worse.
Token voting is trivial to manipulate. A whale accumulates enough tokens, pushes through a bad proposal, and the DAO suffers the consequences. By the time the community realizes what happened, it's too late. The damage is done.
But here's the thing people don't talk about: voter turnout is abysmal.
Most token holders don't vote. They're too busy. They don't understand the proposals. They assume whales control it anyway. So they check out. The community becomes dependent on a small group of voters, which means the whale problem gets worse.
You end up with a system where most people have given up, and a few people control everything. That's not governance. That's oligarchy.
And yet, most DAOs keep using it because they don't know what else to do. Complacency kills.
Prediction Markets: The Empirical Alternative
Here's what most people don't realize: markets have a long, documented track record of predicting the future better than voting, experts, or pretty much any other mechanism we've tried.
Prediction markets have historically beaten election pollsters. Orange juice futures markets predict the weather better than government forecasts. When the Challenger Space Shuttle exploded in 1986, the market identified the root cause (O-ring failure) in 16 minutes. The government investigation took 4 months.
This isn't controversial. It's empirically proven across decades and hundreds of cases.
So why aren't we using markets for governance?
Because until recently, we didn't have the infrastructure. Now we do.
How Prediction Markets Fix Governance
Here's how it works:
Instead of voting on a proposal, you create two markets: one for "proposal passes" and one for "proposal fails." Traders put money down betting on which outcome they think will happen.
The price of each market reflects the collective belief about whether the proposal will be good or bad for the organization. If traders believe a proposal will increase the token's value, they buy YES. The price climbs. If they think it'll tank the token, they buy NO. The price climbs on the other side.
The DAO executes whichever outcome the market prices as most likely to succeed.
That's it. That's the mechanism.
But here's what changes everything:
Incentives are aligned with accuracy. When you're betting real money, you think carefully. You do the research. You price things honestly because your capital is on the line. Token voting? You just click a button. No skin in the game.
Whales can't just buy the outcome. Yes, a whale could buy a ton of YES tokens. But if the market disagrees, the price falls. They lose money. They can't just force a bad decision through.
Voter apathy disappears. People don't have to understand everything to participate. They just have to be willing to bet on their conviction. And markets incentivize betting on truth, not just participation.
Decisions get made faster. Price discovery happens in hours. Token voting takes days of debate and drama. By the time a token vote concludes, the moment has passed. Prediction markets move at the speed of markets.
Signal rises above noise. In token voting, whoever yells loudest wins. In markets, only one thing matters: will this actually work? Everything else is noise. Markets filter it out.
Real Examples: Markets Are Already Winning
This isn't theoretical. Prediction markets are already making better governance decisions than token voting ever did.
Jito's Fee Switch: Jito ran their fee switch governance through MetaDAO's futarchy system. The market indicated that increasing the fee would benefit the protocol. Jito implemented it. The outcome? Exactly what the market predicted. Better for the protocol. Better for token holders.
Sanctum: Sanctum has made all their governance decisions via prediction markets. Not as an experiment. As their actual governance system. Their track record speaks for itself.
The Pattern: Every protocol that has moved from token voting to prediction markets reports the same thing: better decisions, faster execution, less politics.
Why? Because markets price reality. Token voting prices drama.
Why This Matters for Your DAO
If your DAO is still using token voting, you're behind. Not because of hype. Because of empirical performance.
Your governance decisions will be worse. Your execution will be slower. Your whales will have more control than they should. Your community members will be less engaged because they know the system is rigged.
Prediction markets fix all of these problems at once.
And it's not just about better decisions. It's about community trust. When governance is run through markets, it's harder to manipulate. It's harder to hide. The results speak for themselves.
The Transition Is Already Happening
A few leading protocols are already pioneering futarchy. But the transition isn't going to be slow.
Here's why: once communities experience prediction markets, they don't go back. The difference is too stark. Better decisions. Faster execution. Less drama.
As more protocols move to futarchy, it becomes the standard. Builders comparing governance systems will ask: "Why would we use token voting when prediction markets exist?"
Then the answer becomes obvious. You wouldn't.
The only DAOs still using token voting will be the ones that haven't upgraded yet. And they'll be at a competitive disadvantage.
Building the Future of Governance
The infrastructure for prediction markets is proven. Jito and Sanctum are demonstrating it works in practice. The question isn't whether futarchy is viable—it's how fast the ecosystem adopts it.
We're betting it's faster than most people think.
At Common, we're building futarchy as a foundational governance primitive for 2026. Not as an experiment. Not as an optional feature. As the core of how communities will make decisions.
Because we believe the future of governance isn't voting. It's markets. And prediction markets are going to replace token voting the same way token voting replaced traditional voting decades ago.
The transition is starting now. And it's not going to stop.
What This Means for You
If you're running a DAO, start thinking about futarchy now. How would your governance work differently? What decisions would improve? How would your community respond?
If you're a token holder, start asking your DAO: what's your governance roadmap? Are you planning for prediction markets? Why are they still using token voting?
If you're building on blockchain, understand that futarchy is coming. It's not a question of if. It's a question of when and who gets there first.
The protocols that move to prediction markets first will have a governance advantage. Better decisions. Faster execution. Less politics. That compounds over time.
The future of governance is markets. Common is building the infrastructure to make that future real.
The governance revolution is coming. The question is whether you're ready.