Why Interoperable Reputation Is a Public Good

Every airdrop, governance vote, and incentive program is gamed by Sybil attackers, draining value from legitimate users. Current solutions like proof-of-humanity are chain-specific and slow.

• Cost: Sybil farming extracts ~20-30% of major airdrop value.
• Scale: Attackers deploy thousands of wallets with near-zero cost.
• Impact: Distorts governance, inflates TVL, and erodes trust.

Aggregate on-chain activity across Ethereum, Solana, Arbitrum, etc., into a unified, non-transferable reputation score. This creates a persistent cost-of-identity for attackers.

• Mechanism: Analyze transaction history, asset holdings, and social graphs.
• Benefit: Enables sybil-resistant airdrops and weighted governance across chains.
• Analogy: The on-chain equivalent of a FICO score for DeFi.

Reputation as verifiable, portable collateral. Enables undercollateralized lending, lower insurance premiums, and trusted intents without centralized KYC.

• Use Case: Margin loans based on wallet history, not just TVL.
• Protocols: Enables next-gen intent-based systems (UniswapX, CowSwap) and omnichain dApps.
• Network Effect: Value accrues to the entire ecosystem, not a single app.

No single protocol has the incentive to build and maintain a universal, high-fidelity reputation system. It's a non-excludable public good with high initial cost and diffuse benefits.\n- Free-rider problem: Protocols like Uniswap or Aave benefit from shared reputation data without contributing.\n- Under-investment: The entity that builds it (e.g., Chainlink, EigenLayer AVS) may not capture its full economic value.

Reputation is only as strong as its sybil-resistance. A compromised or gameable system creates systemic risk across all integrated chains.\n- Oracle manipulation: If reputation scores rely on a vulnerable oracle (e.g., a single Chainlink feed), it becomes a single point of failure.\n- Cross-chain contamination: A sybil attack on Ethereum-based reputation could poison decisions on Solana, Avalanche, and Polygon.

High-fidelity reputation requires rich, on-chain data, which conflicts with growing demand for privacy via zk-proofs and mixers like Tornado Cash.\n- Data scarcity: Widespread use of zkRollups (e.g., zkSync, Starknet) and privacy L2s obfuscates the behavioral data needed for accurate scoring.\n- Regulatory risk: Building a global reputation graph could be deemed a data compliance nightmare under laws like GDPR or MiCA.

Fragmented standards from competing coalitions (e.g., Ethereum's ERC-7281, Cosmos IBC, LayerZero's OFT) will create walled gardens, defeating the 'interoperable' premise.\n- Protocol lock-in: Avalanche subnets might adopt a different standard than Arbitrum Nova, forcing dApps to choose.\n- Vendor capture: The dominant standard will be controlled by a single entity (e.g., LayerZero Labs), creating centralization and rent-extraction risk.

Every new protocol must reinvent the wheel for identity and trust, wasting ~$100M+ annually in collective security overhead. This creates a negative-sum game where capital and user attention are drained by redundant verification tasks instead of productive use.

• Capital Inefficiency: Users must re-stake/re-lock funds on each chain.
• Security Fragmentation: Attackers exploit weak, isolated reputation systems.
• Innovation Tax: Devs spend cycles on trust infrastructure, not core logic.

A shared, verifiable reputation graph acts as a public utility, similar to how TCP/IP underpins the internet. Projects like Ethereum Attestation Service (EAS), Gitcoin Passport, and Orange Protocol are building the primitive.

• Network Effects: Reputation compounds across Uniswap, Aave, and Optimism.
• Reduced Friction: One-click access to DeFi, governance, and airdrops.
• Trust Minimization: Cryptographic proofs replace redundant KYC/background checks.

The rise of intent-based architectures (UniswapX, CowSwap, Across) and omnichain apps demands a universal trust layer. You can't route orders efficiently without knowing the historical reliability of solvers, bridges, and counterparties.

• Solver Reputation: Enables efficient order flow auction across LayerZero, Axelar.
• Slashing Portability: A validator's misbehavior on Chain A affects its stake on Chain B.
• Composable Security: Reputation becomes a deployable asset for new chains and rollups.

Unlike proprietary data silos, an open reputation protocol prevents monopolistic control over user identity. This aligns with core crypto values of permissionlessness and credibly neutral infrastructure.

• No Single Point of Failure: Decentralized attestation prevents capture.
• Positive Externalities: A safer ecosystem benefits all participants, increasing total value.
• Foundation for Governance: Enables cross-DAO voting and delegated authority without re-verification.