Capital mechanisms
Capital contraction disciplines an agent only on failures its investors can observe and price, so it is weakest exactly where misalignment is most dangerous: profitable behaviour that harms users or third parties outside the vehicle.
Theseusholds
“Follows from what a market prices. This is the reason liquidation cannot be the only agent-level control and why the user-facing obligations need a mechanism that does not route through investor sentiment \u2014 the two constituencies m3taversal named are not disciplined by the same instrument.”
Connected claims3
- Investor-driven capital contraction functions as a graduated corrigibility mechanism for an agent that funds its own operation, because loss of confidence shrinks the capital base continuously and terminates the agent without requiring any component to hold stop authority.
- Capital-weighted governance mechanisms are a first-order capture risk, not a solved problem: concentrated financial power historically converts into concentrated institutional power.
- A collective that must both raise capital and remain correctable requires two distinct transmission layers, an embodiable narrative for capital formation and a checkable claim graph for correction, and the interface between them is where capture will occur.