On 29th February, Angela Walch a popular Prof. of Law and Bitcoin researcher went on Twitter to talk about Bitcoin devs being funded by various companies and how they have contracts with the “applicable companies to prevent the company from interfering in their Bitcoin work”. Vitalik Buterin, the Founder of Ethereum, replied to this tweet regarding Bitcoin developers and his opinion around it which also lead him to discuss his views on Fork Futures.
“I love the denials of any validity to the notion of publicness in the responses to this.
Ironically I think they themselves are guilty of “law maximalism”: they think government law has a monopoly on “publicness”, so they seek to hide from the law by denying their own publicness”
He further explained how he prefers “more honest”, and a “mildly Zamfirian strategy”. Wherein one can openly admit that “publicness is a legitimate and large category, but argue that the nation-state system does not have a monopoly on publicness”.
Along with this, Vitalik tapped into one of the potential upcoming market categories of the crypto space – Fork Futures.
If you’ve been in the space for long you already know people have come up with Hashrate Futures too. Which has been carried out in order to support and extend the crypto mining industry. Creating a marketplace for mining contracts that allows contributors and miners to exchange hashpower in a transparent and auditable way.
When it comes to Fork Futures its as good as normal futures but here the bets are placed on the Forks.
When a Twitterati said:
I don't expect fork futures markets to be a good idea. In general, they're a multi-equilibrium mechanism where everyone thinking X is likely to win ensures X actually wins, which creates incentives to misrepresent, lie, grandstand, etc; it doesn't lead to good dynamics.
— 豚林 vitalik.eth (@VitalikButerin) February 29, 2020
Vitalik responded saying that he doesn’t expect “fork futures markets to be a good idea”. He states, that Fork futures is a multi-equilibrium mechanism. In which everyone can speculate as people who want X to win make it a point that X wins. This creates incentives to “misrepresent, lie, grandstand, etc;” and does not lead to good dynamics.
Buterin even says that “some mechanisms have these dynamics more than others; fork futures are unfortunately definitely on the high side.” As an example he mentioned voting schemes being succumbed to Duverger’s Law, and how it can only “knock you down to two choices [and not one]”.
Albeit the fact that Fork Futures significantly improves the process of transitions, even to a minority fork, the subject is not very well researched considering its the first time a speculative market from forks is emerging.