You might deploy institutions as decentralized autonomous organizations (DAOs), economic applications that function without staff or physical premises. Your citizens might co-own and co-operate companies, guilds, nonprofits, or other institutions without ever renting an office.
The government is a special kind of institution. You and your community as a whole determine how your virtual nation functions. You collectively set economic policy and the rules. Without the inefficiencies of the physical financial system, you’re free to create a sustainable, thriving economy that rewards utility and value.
As your nation grows, you might consider taxing economic activity to fund the development of your community. When citizens acquire or sell lands, for example, or trade digital art like NFTs, taxation rules could fuel the growth and development of your virtual nation, improving it for everyone.
You might also consider funding initiatives yourself. Build startup incubators, issue grants and loans, and incentivize community involvement. The bigger your community, the larger your nation, and the more opportunities you and your citizens unlock.