According to LessWrong, asset futarchy—a governance system that uses markets to predict whether proposals create value—has a critical flaw: the people submitting proposals can game the very markets that vote on them. The article identifies two attacks. In the first, a proposer pledges valuable work but keeps it as a fallback plan. If opposition is weak, manipulation becomes cheaper than delivery—so they pass the proposal, collect payment, and skip the work. Strong opposition makes delivery the cheaper path. Second, bag-holder extraction: a proposer buys market support for a proposal that helps them personally but hurts token holders. Because the proposer is both author and trader, they profit from the trade even if the proposal destroys overall value—as long as their gains exceed the average holder's losses. The core issue: markets work as governors only if voters care about fundamentals. But when proposers have personal financial stakes and can trade the outcome, market price becomes a contest of capital, not collective judgment. The suggested defense requires human oversight—reviewers judging proposal terms. That reintroduces the centralization and gatekeeping that futarchy promised to eliminate.

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