As discussed on InformationDerivativeMarket, futures markets can be used to efficiently pool communal knowledge to answer questions. Not just questions about the future price of a commodity, but any sort of question. Some kinds of questions that markets have been asked include "who will win the next election?", "what will the weather be on tuesday?", "which movies will sell the most tickets?".
One type question that you may ask the market is, "What are people paying attention to? What will they be paying attention to in the future?". In other words, one could build a SharedAwarenessSystem using a market as the moderation algorithm.
Most large-scale SharedAwarenessSystems contain a filter of some sort. Each individual has a limited amount of time per day with which to learn about new happenings (this quantity is called "attention"). Users want the SharedAwarenessSystem to tell them about events that they need to know; the system isn't very useful if it presents many more items per day than the individual can check out; users would prefer the system to separate the wheat from the chaff.
But, a large SharedAwarenessSystem will have access to orders of magnitude more incoming events per day than any single individual has time to check out. In order to be useful to individuals, most SharedAwarenessSystems filter the stream of incoming events somehow.
For example, SlashDot employs a number of editors who decide which submitted stories are posted. KuroShin allows users to vote on which "submitted stories" are "accepted" onto the front page. These are two ways of doing moderation.
Another way to do moderation would be to set up a futures market in attention. That is, each submitted story would be linked to a virtual stock1. Instead of voting for the story, users would buy the story's stock[[real or fictional currency may be used}}. At some point, the story's "success" would assessed, and the stock would pay out currency to its holders2. The payout criterion should be chosen so that stories which users would be most interested in reading make the most money.
With this system in place, users would be able to use the value of the stocks to decide which events to read about. For example, if a certain news item was the most valuable stock, that would mean that the market predicts that this item will be the most interesting story to the site's users. To filter stories, all you have to do is read off the top n items from the list of top stocks.
One difference between a market-based moderation system and a vote-based moderation system is that, instead of one-vote-per-story, in a market users could spend different amount on different stories according to how strongly they feel that the current market price is in error. This increases the accuracy of the system.
Another difference is that, in a vote-based system, users are free to vote based on whatever criteria they like. In a market-based system, users are rewarded for allocating attention to maximize expected "success".
One simple criterion would be the rating of users who have read the story. In other words, users vote on stories, and this vote is the payoff for the market3. Why not just vote, then?
This enables readers to find important blogs; you can find what the BlogShares market considers important just by reading the most valuable blogs. What is valuable is that "importance" in this context does not mean "how many incoming hyperlinks are there today", but rather, "how many incoming hyperlinks are predicted for the future". For example, an unknown but very high quality blog would be expected to have a relatively high price, even though it currently has few incoming hyperlinks5.
This allows readers to choose the blogs that they want to read in a better way than simply looking at a list of the blogs with the currently greatest numbers of incoming hyperlinks.
[new]BlogShares; in some sense it's a generalization of the BlogShares idea, applying it to any item to which you may want to pay attention, rather than only to blogs. Perhaps everyone else involved with that project has been thinking along those lines for quite some time. I'd be interested in hearing about related discussions.