To execute liquid democracy on the IC, stakers can follow neurons that they believe will vote in their interests. This has worked because neurons have, in most practical terms, stood in for natural persons or organizations that the staker trusts.
But the one-to-one correspondence between neurons and their controllers is breaking down, as Internet Identities (II’s) may soon be sold for a fee. If a staker follows a neuron controlled by an II, and that II is sold, then the staker is effectively now following the II’s new controller - whom the staker did not choose to follow in the first place.
II transfers can take place without notice and without a trace. So stakers following neurons can never be sure that they are still following the person or organization that they intend to, as the neuron they are following could have been sold with the attached II without stakers’ knowledge at any time.
So how can stakers follow any neuron, knowing that the neuron they are following can be effectively sold, without their knowledge, at any time, to someone they don’t want to follow?
Compounding the problem, people could make good money by gaining a lot followers, and then selling the II at a premium (given its overweighted voting power). Selling high-follower II’s could be quite profitable, so high-follower II-controllers could have a strong incentive to sell their IIs-and-followers for a pretty penny.
This problem is also more urgent now that new neurons could soon be named in the NNS dapp as potential followees. The organizations behind these neurons could well gain many staker-followers quite quickly given additional visibility in the NNS dapp, as they are each (in my view) very competent organizations. But in gaining these followers, these organizations could soon face a very strong private incentive to sell their high-follower-II’s at potentially very handsome prices, pitting their private interests against the good of the followers they represent. This reduces the confidence that followers could have in following these by-all-accounts-well-intentioned organizations.
So in sum: II sales threaten liquid democracy, by undermining stakers’ trust that they are following the persons they want to, and who won’t sell them out. Without this trust, stakers cannot feel confident in following other neurons. If we want to defend liquid democracy and facilitate decentralization in governance on the IC, we must reduce the likelihood that followers’ votes can be sold for a fee, without followers’ knowledge.
There may be some straightforward ways to reduce the likelihood that followers’ votes can be sold. But I will leave that for a subsequent post, preferring first to invite comment on the problem as outlined above. Curious to hear others’ views on whether this is a problem worth addressing.