The Uniswap Foundation and Optimism Foundation are testing futarchy as a governance mechanism, marking a significant step forward in decentralized decision-making. This collaboration emerges from both organizations' understanding of information finance and its potential to transform how decentralized communities make decisions at scale.

Optimism and Uniswap Foundation are key ecosystem participants in decentralized governance. We consider it our mandate to collaborate and improve the governance process for delegates, participants, and all those who contribute to our Protocols' decentralization.

This responsibility has led us to examine foundational questions in governance design: How can ecosystems balance delegate groups' expert knowledge with broader community participation? While delegate or expert-based systems bring important expertise to decision-making, by creating a mechanism for unbiased collective decision-making, we believe we can expand participation and further strengthen decentralized systems.

In pursuit of self-sustaining governance systems, the Uniswap Foundation and Optimism Foundation have teamed up through a joint grant to Butter to launch Futarchy Implementations, an experiment that utilizes futarchy to select grant recipients.

The Power of Butter

Using the wisdom of the crowd, Butter ties grant funding decisions directly to measurable outcomes and rewards participants based on how close their predictions were to the final outcome. This incentive structure promotes data-driven decision-making and better information aggregation, improving upon more traditional governance processes where misaligned incentives within communities often leads to poor decisions.

With Butter, the community expresses its views by predicting the impact of grants instead of voting for their preferred recipient. By rewarding accurate predictions, we align the incentives of decision-makers and the outcomes we agree are desirable, leading to a more objective, neutral, collaborative governance system.

Creating Alignment Between Builders & Governance Goals

Futarchy embodies the principles of our ecosystem: credible neutrality, permissionlessness, and decentralization. Once a community agrees on the outcomes they want, Butter's protocol aggregates the wisdom of the crowd to identify which grants are most likely to achieve them.

For builders and grantees, Butter has the potential to transform the funding landscape. The system rewards forecasters that most accurately predict the impact of funded projects, creating direct alignment between builders and governance objectives. This means more efficient grant allocation, clear success metrics from day one, ongoing feedback, and reduced dependency on social capital.

For governance researchers and analysts, the Butter experiment provides real-world data for studying futarchy and crafting research that shapes future governance systems.

Implementation Details

Butter combines several key components: futarchy powered by smart contracts enabling decision-making on project outcomes, oracles that verify success metrics, and an eventual integration layer that bridges futarchy with treasury management systems, while an intuitive interface aims to make participation accessible to everyone.

This collaboration leverages the unique strengths of both organizations: Optimism Foundation brings expertise in governance experimentation and mechanism design, while the Uniswap Foundation provides its grantees and community builders operational, technical, and go-to-market support.

Unichain, a DeFi-native OP-stack Superchain provides the ideal infrastructure for hosting these experiments. Combining these capabilities can create a testing ground for governance innovation.

In the coming weeks, we will launch two parallel experiments facilitated by Butter, open to both communities:

• For Optimism Governance: A futarchy contest where forecasters can vote with play money to earn OP rewards by accurately forecasting the impact of grants awardees, forecasters will ultimately determine which teams receive grants.

• For Uniswap Governance: Conditional Funding Markets (CFMs) where forecasters can deposit USDC and earn rewards by predicting outcomes, ultimately determining how teams will be funded to drive lending protocol growth on Unichain.

Get Involved

This collaboration between Optimism Foundation and Uniswap Foundation opens a new chapter in decentralized governance. While this initiative is still experimental, with your participation, we aim to develop practical governance systems that scale the Optimism and Uniswap communities. The future of governance is measurable, scalable, and open to all. To participate in these experiments, sign up here.