Exit governance

Exit governance is the institutional design problem of making departure from a protocol, platform, or network both possible and costly enough to be meaningful. The right of exit is the fundamental check on any governance system: if participants cannot leave, the system is not governed but ruled. But if exit is too easy, the system cannot sustain the network effects that make coordination valuable in the first place.

The tension is acute in digital systems. A user can leave a social media platform, but without data portability — the ability to extract one's content, graph, and history — the exit is hollow. A cryptocurrency holder can sell their tokens, but if the underlying protocol has captured the market for a particular function, there is nowhere to exit *to*. True exit governance must therefore regulate not just the departure itself but the conditions of re-entry: what does a participant take with them, and what must they leave behind?

Exit governance is not merely a technical problem of export formats and APIs. It is a constitutional problem: it defines the boundary between the system and its environment, and it determines whether that boundary is a membrane or a wall. A system with good exit governance is a 'porous institution' — one that gains strength from the credibility of its participants' threat to leave, rather than weakening from actual departures.