Reputation in protocol governance

Governance Designs
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Existing designs

Emergent reputation

Reputation tied to individuals and their public addresses naturally has a large role in all parts of governance systems, especially around delegated voting and the making of proposals (proposal mining).

Rotating councils

Rotating council performing the role of an oracle. Usage would be justified by reputation only.

Backfeed and DAOStack: reputation tokens for alignment

Backfeed introduced the idea of non-transferrable reputation tokens. Reputation is necessary for an agent to produce contribution evaluations, which is at the core of how Backfeed aims at protecting alignment in a given network. Reputation is hard to gain, but allows evaluating contributions, thus directing the flow of both reputation and financial tokens from the DAO.

DAOStack suggested the use of non-transferable tokens that are also slashable by the mechanism. Slashability adds further security on top of directing emissions.

Discussion

Limits of emergent reputation

Obviously, there is no reliable way to import on-chain all off-chain reputation. But some of it can, through additional mechanisms as we’ll review below.

Vitalik’s suggestion of a “not quite crypto-economic” reputation system leverages emergent reputation and wraps it in a simple rotating seats vote-based mechanism. But as mentioned by Dankrad in a follow-up response, this doesn’t preclude such a system from economic vulnerability to collusion.

Limits of non-transferrable reputation tokens

This heavily relies on reputation token-holding accounts being strongly tied to an actual identity (even if hidden via a pseudonym). Not being transferable is a requirement but does not suffice, as it is still possible to use secure cryptographic methods to transfer private keys against a payment, and account abstraction efforts on Ethereum are nullifying the premise that addresses might be identified to EOAs.

Build on-chain reputation from strictly identifiable user data

We call user data any data that represents actions or claims that are tied to a single blockchain address.

We call strictly identifiable the data that can be provably identified as belonging or being produced by a given address.

Leveraging off-chain proofs (cryptographic signatures, and ZK if private data is required), on-chain contracts can build a reputation profile for blockchain addresses without the drawbacks of reputation tokens.

Literature

A not-quite-cryptoeconomic decentralized oracle

Backfeed Protocol - The Objective Layer

  • Authors: Matan Field, Jelle Gerbrandy, Elad Shtilerman, and Primavera de Filippi
  • Description: Backfeed white paper. “Reputation flows in a system where a group of people vote on the value of a contribution”.
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