How do predictors get paid even when there are only bets that the proposal will pass?

Q.) In our community Telegram it was asked by @julienbtc: "How do predictors get paid when there are only people voting yes for a proposal?"

A.) Answered by @Matan [DAOstack Architect]:

Thanks @julienbtc . The DAO has to put forth a “management budget”, in form of ceratin amount of GEN tokens. This pool is adding a GEN stake to any proposal that passes, to reward those who predicted it will pass - which indeed otherwise would not have the incentive to risk their funds, in case no objective predictors show up. Does that answer your question?

DAOs decide themselves how much budget to allocate to proposals (as a fraction of the boosting threshold), but then the higher the fraction would be the more the DAOs will attract the “predictors network” to look into them, and thus the more their decision-making process will be scalable and resilient. So basically it’d be an economic arm-race between DAOs to compete over the attention of predictors, and it’ll saturate itself into the natural cost-effect limit. On the other hand, my prediction is that the more DAOs pull in the attention of predictors the more effective and scalable they’ll be, and thus the more signficantly productive they’ll be, thus even more they could pay as governance budget to predictors. So this budget could be quite significant, and quite significantly worth it.


What if the dao itself did not ask for the improvement, yet the inefficiency was spotted and/or fixed by an onlooker? A couple issues here but the core change to build off of would be being paid out of the cost savings resulting from the improvement. Each dao might have its own rule set, or use one of many standardized rule sets, for that situation, outlining percentages or whatnot… ahh gotta run for now.