What Kinds of Incentives Encourage Participation in Democracy? Evidence from a Massive Online Governance Experiment

How can we democratically govern the AI, social media, and online platforms of the future? Today, low participation is a major barrier to community governance online. We leverage a digital quasi-experiment that allows us to study the links between incentives and political participation at a scale and granularity not previously possible. We focus on a web3 startup called Optimism that distributed digital tokens worth roughly $28 million USD to more than 300,000 active participants in its governance system as part of a sequence of rewards meant to encourage long-run engagement. Studying 1.2 million unique wallet addresses, we find that the reward scheme induces new users to participate in Optimism’s governance, has larger effects for smaller token holders, and leads voters to spread their votes across delegates more widely. Together, the results suggest that reward schemes that give people a durable stake in the community and promise a sequence of future rewards are able to broaden participation in online democracy noticeably, at least in the short run under the proper conditions.