Evolving a Decentralized Platform Ecosystem: Self-reorganization and Complementor Participation

Platform ecosystems have increasingly adopted self-organization to facilitate peer-to-peer decentralized collaboration. Just like any organizational system, decentralized platform ecosystems reorganize to update their alignment with the internal and external environments. However, unlike reorganizations of centrally managed ecosystems performed by the owners, reorganizations of decentralized platform ecosystems do not rely on formal authority. Instead, the network self-reorganizes to renew the structure, rules, and information to evolve. Despite the interdependence between the complementors (i.e., components) and the platform (i.e., core), little is known about how self-reorganizations influence complementor participation and engagement. In this study, we investigate all self-reorganization events (i.e., hard forks) that have taken place on Ethereum, a blockchain-based decentralized smart contract platform, to unpack how self-reorganizations of a complex decentralized platform ecosystem influence the participation of complementors. We find that, while self-reorganizations disrupt general complementor participation at transition, they facilitate the adaptation of complementor technical engagement over time. In addition, the relationship between self-reorganization and complementor participation is moderated by the nature of self-reorganization, i.e., the degree to which governance-related rule changes are involved. Our study integrates the organization design and platform literature and contributes to a deeper understanding of the interdependence of decentralized platform ecosystem evolution. In practice, our findings have implications for entrepreneurs building decentralized applications on top of decentralized platform infrastructures (e.g., smart contracts).