The Network State is intended as an archipelago of crowdfunded physical territories, with a virtual capital, and a large enough population, income, and real-estate footprint to attain a measure of diplomatic recognition from pre-existing sovereignties.

But how is this Web3 archipelago networked and how does it change as it grows? Let’s design a Network State together.

Designing The Network State’s Archipelago Strategy

Our Network State’s archipelago strategy features a complete integration of the core network, meaning that there are no hubs. The result is network homophily that encourages the support of diverse beliefs, maximized reciprocity for maximized utility, and improved communication and connectedness for the growth of trust, social capital, and a high-quality exchange environment.

The foundation of this archipelago strategy, a fully connected module of five nodes, is illustrated in the image below. It is through complete integration of the core network, combined with a modular corporate hierarchy and a replication of the five node module, that we achieve a scale-free property.

Through a complete integration of the core network, the following characteristics of our Network State’s archipelago strategy are enabled:

• Maximized reciprocal ties
• High network closure
• High network density
• Nested hierarchical modularity
• Scale-free property
• Size-independent clustering

The image below illustrates the iterative construction of our Network State’s archipelago strategy. Note that it is through replication of the module of five nodes that we reach each iteration.

Now having clarified the design and characteristics of our archipelago strategy, we can discuss a polycentric model.

The Network State’s Archipelago Strategy With Polycentric Governance

As polycentrism is well-designed to manage the risks pervasive to networked communes, such as The Prisoner’s Dilemma and The Tragedy In Commons, polycentric governance models have been applied to networked arrangements of all kinds for years. This isn’t a new idea. What is new in our model is that a corporate hierarchy reflecting both horizontal and vertical departments and tasks has been applied at the level of nested hierarchical modularity to enable scale-free growth through size-independent clustering.

What Is Polycentrism?

Polycentric connotes many centers of decision making that are formally independent of each other. In a polycentric system, individuals or organizations simultaneously participate in multiple rulemaking venues. These individuals or organizations become bridges between different governance centers to foster interaction. In other cases, interaction may emerge because of market-like competition. For example, when different governance centers offer the same service. By definition, the polycentric approach excludes ideas around top-down coercion, as governance centers are per definition thought to be independent.

In essence, polycentrism implies the diffusion of sovereignty over several levels of governance and numerous institutions, and a polycentric system exists when multiple public and private organizations at multiple scales jointly affect collective benefits and costs. 

When successfully maintained, polycentric systems are intended to result in increased liberty, a wider array of choices available to citizens seeking assistance from public authorities, and easier access to quasi-market arrangements that more closely approximate the efficiency of competitive markets.

Corporate Hierarchy Should Integrate Horizontal & Vertical Departments & Tasks

The structure of the corporate hierarchy is often criticized for its lack of adaptability and flexibility. To resolve the static processes and stagnant behaviors created by such an organizational structure, ours makes a distinction between departments and tasks organized on the basis of purpose, or vertical departments, and those departments and tasks organized on the basis of process, or horizontal departments.

Process departments are those departments common to all or to several departments. Because they are engaged in the same work tasks group-by-group, these processes and the staff of these horizontal departments should be brought together.

When we consider horizontal versus vertical corporate departments and tasks, the primary and secondary organizational departments (Finance, Marketing, Sales, Human Resources, Operations, and R&D) are to be organized as follows:

• Horizontal (Process) Departmental Roles
  • Finance Director
  • Human Resources Director
  • Operations Director
  • People Director
• Vertical  (Purpose) Departmental Roles
  • Marketing Director
  • Research & Development Director
  • Sales Director

A Polycentric Corporate Hierarchy Yields Scale-Free Growth

Understanding the above and remembering that both horizontal and vertical tasks have been applied at the level of nested hierarchical modularity, we can now build our polycentric model.

A Fully Connected Core Network

We start with a fully connected module of five nodes. This is the foundation of our archipelago strategy, as mentioned above, and it is through complete integration of the core network, combined with a modular corporate hierarchy, that the we achieve a scale-free property.

The departmental roles that best fit into the core network are the vertical roles of Finance Director, Human Resources Director, Operations Director. As they aren’t typically process related, or involved in tasks that permeate the entire organization, various specialists may also fit into the core network. At the center of the core network is the CEO. Now our core network features high network closure and maximized reciprocal ties.

A Modular & Nested Hierarchy

Replicating the core module of five nodes allows us to scale to the next iteration of our archipelago strategy, and employ the horizontal, or process, departments that permeate the entire organization.

The departmental roles that best fit into these replicated modules are the horizontal roles of Director of Marketing, Director of Sales, Director of Research & Development, and the Director of People. Now, our polycentric archipelago, which features high network density and nested hierarchical modularity, as well as high network closure and maximized reciprocal ties, can be illustrated as such:

Size-Independent Clustering

Finally, we scale without limitation through size-independent clustering by replicating over and over again the modular and nested structure mentioned above in order to reach the third iteration of our polycentric archipelago. In scaling to this iteration, our network exhibits its scale-free property and achieves maximized reciprocal ties, high network closure, high network density, nested hierarchical modularity, and size-independent clustering.

Polycentrism is truly achieved at this point, and our Network State’s polycentric archipelago can now be illustrated with the following details:

Conclusion

Designed for longevity, our Polycentric Archipelago Network State Model is infinitely scalable and possesses all the essential attributes required for the active exercise of diverse opinions and preferences, as well as for spontaneous order through evolutionary competition. These attributes include:

• Autonomous decision-making layers
• Freedom and ability to enter and exit
• Multiplicity of decision-making centers
• Alignment between rules and incentives
• Overarching systems of rules that are shared and enforced

Thanks for reading!