Legitimacy is a pattern of higher-order acceptance. An outcome in some social context is legitimate if the people in that social context broadly accept and play their part in enacting that outcome, and each individual person does so because they expect everyone else to do the same.

Legitimacy by brute force: someone convinces everyone that they are powerful enough to impose their will and resisting them will be very hard. This drives most people to submit because each person expects that everyone else will be too scared to resist as well. Legitimacy by continuity: if something was legitimate at time T, it is by default legitimate at time T+1. Legitimacy by fairness: something can become legitimate because it satisfies an intuitive notion of fairness. See also: my post on credible neutrality, though note that this is not the only kind of fairness. Legitimacy by process: if a process is legitimate, the outputs of that process gain legitimacy (eg. laws passed by democracies are sometimes described in this way). Legitimacy by performance: if the outputs of a process lead to results that satisfy people, then that process can gain legitimacy (eg. successful dictatorships are sometimes described in this way). Legitimacy by participation: if people participate in choosing an outcome, they are more likely to consider it legitimate. This is similar to fairness, but not quite: it rests on a psychological desire to be consistent with your previous actions.

Application-layer projects that support public goods in the community should get the support of the community, and this is a big deal. The example of DAI shows that this support really matters!

But this goes far beyond just Ethereum itself. NFTs are one example of a large pool of capital that depends on concepts of legitimacy. The NFT industry could be a significant boon to artists, charities and other public goods providers far beyond our own virtual corner of the world, but this outcome is not predetermined; it depends on active coordination and support

And blockchains are full of coordination games