What's a small moderate party? Moderate parties are larger than other parties.

No, not necessarily. They may be so bland as to please nobody. (This was the case for an old rural progressive party in my country for many years). Or, they may be neutral by default on most left-right issues because they really care about something mostly orthogonal to it. This has been the case for the Christian Democrats and to a lesser degree the Farmer's party in my country.

The paradox is that they get a good deal of power being pivotal, but only on issues they don't really care so much about.

See the role the Free Democrats https://en.wikipedia.org/wiki/Free_Democratic_Party_(Germany... played in the German Bundestag for a long time.

> D are powerless whether it's a centrist or an extremist.

No. That's only true in a deterministic parliament that works by majority rule.

You could have your parliament make decisions by lot (with probabilities weighted by what MPs vote for).

Or you could give your parliamentarians a steady stream of tokens they could use for voting; small parties could save up their tokens for a while, to have a decisive influence on something they care about.

(You'd have to work out a lot of kinks in such a token system..)