Gnosis, one of Ethereum’s earliest ICOs, is spinning up a DAO that uses a novel mode of governance you’ve probably never heard of.

The newly launched GnosisDAO will allow Gnosis users to vote on platform governance and development.

Gnosis CEO Martin Köppelmann told CoinDesk the DAO’s voting proposals “can be really wide-reaching: product roadmap decisions, treasury management, starting new ventures, funding public goods. DAOs open up a large space for collaboration and experimentation.”

One of GnosisDAO’s key marketing points is its integration with the Gnosis prediction markets. Because any protocol change will have an associated prediction market where traders are betting on its impact, Gnosis users can judge a proposal based on the market’s attitude (whether traders overall think it’s good or bad for Gnosis).

Read more: Ethereum Gas Fees Drive Gnosis-Powered Prediction Market to xDai’s Layer 2

Futarchy: Testing governance with prediction markets

This governance model, called futarchy, was formulated by George Mason University economist Robin Hanson. Futarchy proposes the efficacy of democratically elected officials or policies should be tested by prediction markets; in other words, prediction markets create a barometer for success or failure of policies, which voters can then consult to augment their decision-making.

“People can influence [a vote] with their trading decision. As a new proposal is on the table, people can already signal whether they would buy or sell the token (GNO) if the proposal was implemented. It is basically the most direct way to ask ‘the market’ for feedback on a proposal,” Köppelmann told CoinDesk.

Gnosis will bootstrap these markets using funding from Gnosis’ treasury of 150K ETH and 8 million Gnosis tokens (GNO). At launch, the Gnosis treasury will allocate 1,000 ETH and 20,000 GNO into the GnosisDAO’s prediction markets.

The DAO will launch with three proposals: one that creates a template for Gnosis Improvement Proposals (GIPs), one that establishes a governance token for the DAO called SAFE and one that distributes a one-time reward to early DAO participants.

Köppelmann told CoinDesk the votes are indeed weighted by “how many [GNO] tokens you have.” But voters can also ignore the prediction markets and vote however they want on a proposal.

Given that voters can go against the direction of the markets, GnosisDAO will be launching with a softer futarchy bent that may harden as the DAO grows.

“We are not going all in on futarchy on day 1,” Köppelmann said.