It's pretty simple actually. Imagine direct democracy, but with the option to delegate your vote to someone else, who can delegate their votes to another person, and so on. At the end of the day, the major powers aren't based on traditional parties but on layers of delegation.

The obvious danger here is its tension with the secret ballot. Currently, your boss can put all sorts of pressure on you to vote a particular way (even if it is illegal), but he ultimately can't step into the voting both with you. In contrast, with "liquid democracy", the chain of delegation may afford all sorts of ways to decide how someone "voted".

But also arguably disruptive, curve-jumping, and paradigm-shifting if it scales and gets wide adoption.

If. :P

It's a bad idea.

1. It will worsen, and not improve, the effect of populism and demagoguery.

2. The complexity of overlapping and differently drafted proxy statements will cause legal nightmares. There will be ceaseless litigation to sort out questions of which proxies count, which proxies supersede which other proxies etc etc.