Decision System
Decisions priced in SOLO
Major Solomon decisions are made through MetaDAO's conditional decision markets rather than conventional token voting. Each active proposal creates two conditional markets:
- PASS, representing the price of SOLO if the proposal is approved.
- FAIL, representing the price of SOLO if the proposal is rejected.
Participants trade according to their expectations for SOLO under each outcome.
A proposal therefore asks a specific economic question: is SOLO expected to be worth more if this action is taken?
A proposal passes when the time-weighted PASS price exceeds the FAIL price by the required threshold. The default threshold is 1.5%.
Scope of proposals
Proposals can authorize material actions involving Solomon and its assets, including:
- treasury spending and capital allocation
- investments in products, operations, partnerships, or acquisitions
- SOLO acquisition or distribution programs
- changes to treasury-provided liquidity
- additional SOLO issuance
- incentive programs
- changes to controlled token or organizational parameters
The same system can be used as Solomon's needs evolve, without changing the underlying ownership structure.
Proposal lifecycle
- Create
Anyone can submit a proposal describing an action for Solomon to take.
- Activate
A proposal becomes active once the required amount of SOLO has been staked behind it. The default activation requirement is 500,000 SOLO.
The stake functions as an anti-spam mechanism. It does not determine the outcome of the proposal and is not slashable. Only one proposal can be active at a time.
- Trade
Once activated, a proposal enters a three-day decision period.
A portion of Solomon's spot liquidity is moved into conditional PASS and FAIL markets. Participants can then trade SOLO based on its expected value under each outcome.
Trades associated with the eventual outcome settle normally. Trades associated with the alternative outcome revert.
- Finalize
At the end of the decision period, the proposal is evaluated using time-weighted prices.
If the PASS price exceeds the FAIL price by at least the required threshold, the proposal passes. Otherwise, it fails.
Time-weighted pricing reduces the influence of short-lived price movements immediately before finalization.
Example
Assume Solomon is considering allocating $2 million of treasury capital to deepen SOLO liquidity.
At the end of the decision period:
- PASS-SOLO has a time-weighted price of $1.02.
- FAIL-SOLO has a time-weighted price of $1.00.
The market is valuing SOLO 2% higher if the proposal is approved. Because the difference exceeds the default 1.5% threshold, the proposal passes.
The result is determined by the market's estimate of the proposal's impact on SOLO, rather than by a count of yes and no votes.