Moving from “Self-Verification” to “Third-Party Verification” Will Significantly Raise Operating Costs

Earlier I published a reflective article, “KangAi Commune Is So Open and Transparent, Yet Still Questioned? AI Opened My Eyes”, setting out KangAi Commune’s plan to advance “external verification.” There is an economic logic behind it, but we must also face a real cost:

Costs will rise significantly. Understanding that rise requires clarifying its internal mechanism, rather than dismissing it as inefficient management.

First, the shift of cost from “hidden” to “explicit” is a return to proper accounting, not extra waste.

Under the self-verification model, oversight is not costless; it is internalized and concealed. If reviewers are platform employees and the verification system is a platform-owned asset, with oversight and operations sharing the same infrastructure, then the cost is scattered through daily expenses, hard to measure independently — and the platform has a natural incentive to compress that spending. External verification is different: third-party custody, independent auditing and compliance supervision are all independent market entities, and their manpower, expertise and independence must be paid for at market prices. For the same oversight, moving from inefficient internal performance to professional external contracting, so that the book cost moves from hidden to explicit and from smaller to larger, is an inevitable result.

Second, a principal–agent structure necessarily generates agency costs.

Bringing in external verifiers creates a principal–agent relationship. An independent third party must have no interest in either side, and maintaining that independence depends on multiple checks: contractual constraints, multi-party co-signing, cross-review and so on. Each additional check raises the reliability of oversight — and adds to the cost. This is an inherent component of agency costs (principal costs, monitoring costs, incentive costs) and cannot be avoided.

Third, the professional premium is the fair price of independence.

Internal self-inspection by the platform mostly relies on existing staff and facilities, so the marginal cost is low, but it amounts to “amateur oversight,” whose credibility is limited by the identity of an interested party. The market price of professional services such as independent auditing, fund custody and legal compliance embodies the value of professional skill and a neutral stance. Buying professionalism and neutrality at market prices is the necessary expenditure for transferring the right of verification.

Fourth, the judgment that “self-verification saves money” needs to be reexamined.

Self-verification does save external fees on the platform’s books, but this shifts the cost of trust onto members and onto society: under information asymmetry, members are forced to invest their own cost of doubt, cost of monitoring and risk premium. What the platform saves is a small sum; what the whole of society pays is the systemic cost of distrust. External verification looks more expensive, but in fact it exchanges a measurable, explicit expenditure for a trust cost across society that cannot be measured.

In sum, rising costs are not a management failure, but the reasonable consideration for upgrading the trust mechanism from “internal self-verification” to “societal third-party verification.” Trading certainty for trust, and explicit cost for long-term reputation, is a necessary investment for a mutual-aid organization to go steadily and far.