What Happens When Anyone Can Be Your Representative? Studying the Use of Liquid Democracy for High-Stakes Decisions in Online Platforms

Andrew B. Hall and Sho Miyazaki
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Andrew B. Hall: Stanford U and Hoover Institution
Sho Miyazaki: Stanford U

Research Papers from Stanford University, Graduate School of Business

Abstract: Since the 19th century, political reformers have proposed broadening civic and corporate governance by allowing voters to delegate to any other voter — sometimes known as liquid democracy. Today, systems like liquid democracy have become an important part of ongoing efforts to create democratic online platforms governed by users rather than elites. We provide a first empirical political science study of liquid democracy in a high-stakes, real-world setting, analyzing data from over 250,000 voters and 1,700 proposals across 18 crypto projects (“DAOs†) built on the Ethereum blockchain. We find that, on average, 17% of voting tokens are delegated, with substantial clumping on the most-popular delegates. Delegation is primarily bottom-up, with smaller token-holders more likely to delegate. More active voters receive more delegations, suggesting somewhat informed decision-making. Using a difference-in-differences design, we estimate that creating online hubs to coordinate delegation significantly increases delegation and overall voting rates. In sum, liquid democracy can foster bottom-up participation, particularly when paired with tools for coordination. On the other hand, real-world participation remains relatively low among both voters and delegates, posing an important challenge to liquid democracy not yet contemplated in existing theoretical literature.

Date: 2024-10
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