Community-Based Reputation Will Outperform Top-Down Models

Top-down systems rely on centralized validators, creating single points of failure and high-cost verification. Community graphs are inherently Sybil-resistant.

• Cost to Attack: Spoofing a centralized KYC provider costs ~$10; corrupting a web-of-trust requires subverting >51% of a network.
• Example: Proof-of-Humanity vs. Traditional KYC. The former uses social verification to create a cost-prohibitive attack surface.

A single score (e.g., FICO) tries to represent trust across all contexts, failing at all of them. Reputation must be composable and application-specific.

• Granularity: A user's lending reputation on Aave should differ from their governance reputation in MakerDAO.
• Composability: Projects like Gitcoin Passport and Orange Protocol allow dApps to build custom, weighted reputation models from verifiable credentials.

Centralized providers profit from data hoarding and opaque scoring, creating adversarial relationships with users. Community models align incentives through stake and participation.

• Staked Identity: Systems like BrightID or Idena require active participation, making reputation a sunk cost asset.
• User Ownership: Protocols like Disco and EthSign return data sovereignty to the user, turning reputation into a portable asset class.

A fresh wallet is a blank slate, indistinguishable from a bot. This breaks airdrops, governance, and any system requiring trust. Manual verification (KYC) is a privacy-invasive bottleneck.

• Sybil resistance is the foundational challenge for web3 social and governance.
• Top-down attestations (e.g., government ID) are not composable and create data silos.
• Reputation must be portable and self-sovereign, not locked to a single app.

A public good infrastructure for making statements about anything. It's the schema layer for reputation, enabling any entity (person, DAO, protocol) to issue verifiable on-chain or off-chain attestations.

• Schema-based flexibility: Define attestations for skills, KYC status, or community membership.
• Composability: Attestations from Gitcoin Passport, Optimism's Citizens' House, or a local DAO can be aggregated into a unified profile.
• Revocability & Privacy: Supports off-chain attestations with on-chain proof for selective disclosure.

Reputation becomes a function of provable actions and peer validation. This shifts the source of truth from a central issuer to a decentralized network of verifiers.

• Proof-of-Participation: Reputation is earned via governance votes, successful grants, or consistent protocol usage.
• Community Curation: Projects like OrangeDAO and Developer DAO curate membership via peer attestation, not application forms.
• Anti-Enshrinement: Users own their graph, preventing platform lock-in and enabling new sybil-resistant primitives.

Building the PageRank for web3. OpenRank analyzes on-chain social graphs (e.g., Farcaster, Lens) to compute a decentralized reputation score based on the quality of connections, not just quantity.

• Algorithmic Sybil Resistance: Scores nodes based on the reputation of their neighbors, demoting spammy subgraphs.
• Drive Discovery: Powers contextual feed algorithms and sybil-resistant governance for protocols.
• Protocol-Agnostic: Can score wallets based on DeFi activity, NFT holdings, or social interactions.

Your professional identity is trapped in LinkedIn PDFs and unverifiable claims. Hiring, grant allocation, and DAO onboarding are slow and trust-based.

• No single source of truth for skills and accomplishments.
• Credentials from RabbitHole quests, Layer3 bounties, or Gitcoin grants live in isolated platforms.
• This inefficiency creates massive friction in talent coordination and capital allocation.

A protocol for representing and funding positive impact. It shifts reputation from 'who you know' to 'what you've provably accomplished'.

• Mint Impact Claims: Projects mint hypercerts for work done (e.g., funding public goods, open-source development).
• Retroactive Funding: Protocols like Optimism's RetroPGF can use hypercerts as a verifiable record of impact to allocate capital.
• Composable Reputation: A hypercert is a portable, tradeable asset that constitutes a verifiable entry on a contributor's reputation ledger.

Billions in assets are locked out of DeFi because they lack formal title or exist in opaque, off-chain systems. Traditional credit scoring ignores community trust.

• Unbanked SMEs cannot leverage future cash flows or local inventory.
• Informal property rights prevent land from being used as loan collateral.
• Result: A massive, $1T+ latent capital deficit in Global South economies.

Protocols like Getline and Sovryn are building decentralized credit by sourcing reputation from community validators, not centralized bureaus.

• Local validators (e.g., suppliers, customers) vouch for borrower credibility, creating a sybil-resistant score.
• On-chain repayment history becomes a portable, composable asset across DeFi.
• Enables undercollateralized loans for vetted entities, unlocking working capital.

Projects like Guild.xyz and Kleoverse tokenize professional and community contributions as verifiable, tradeable reputation.

• DAO contributors earn soulbound NFTs for completed bounties and governance, creating a portable resume.
• Micro-task platforms in emerging markets use this to establish trustless work history.
• This social capital NFT can be used as collateral for microloans or to access premium gigs, bypassing predatory local lenders.

Migrant workers pay ~6.5% in fees to send money home, with slow settlement and zero credit benefits. Their consistent financial behavior is a data asset they don't own.

• Remittance history is siloed within companies like Western Union, providing no upside to the user.
• This data proves reliability but cannot be used to build credit for families in receiving countries.
• Result: A perpetual cycle of high-cost transactions with no wealth-building utility.

Protocols like Superfluid and Sablier enable real-time salary and remittance streams. This continuous flow becomes a verifiable reputation signal for undercollateralized lending.

• A live payment stream from an employer or overseas relative acts as proof of future cash flows.
• Lending pools can underwrite loans against these streams with automated, non-custodial clawbacks.
• Turns a cost center (remittance fees) into a capital asset, enabling home loans or business financing.

Community reputation requires a decentralized enforcement layer. Kleros and Aragon Court provide the arbitration to resolve disputes without state legal systems.

• Juries of token-curated peers adjudicate claims of fraud or default on reputation-based loans.
• Creates a credible threat that enforces good behavior, making the reputation system resilient.
• Essential infrastructure for replacing corrupt or inaccessible local courts, especially in emerging markets.

Proof-of-humanity and social graphs are table stakes. The real value is in context-specific, portable reputation that can be used across dApps. Airdrop farming has rendered generic on-chain identity insufficient for high-value coordination.

• Sybil costs are now sub-$1, making spam trivial.
• Static attestations (e.g., "is a human") lack financial and behavioral context.
• Walled gardens like Lens or Farcaster limit composability.

Treat reputation as a soulbound, context-specific NFT that accrues value through verifiable actions. This creates a native financial primitive for trust, moving beyond binary verification.

• SBTs encode contributions (e.g., governance votes, successful OTC trades).
• Reputation can be staked or slashed, aligning incentives (see Olympus Pro bonds).
• Composable across protocols: A lending protocol can trust a DAO's contributor SBT more than a credit score.

Replace admin-controlled allowlists with decentralized curation markets. Let communities stake capital to vouch for members, creating a skin-in-the-game reputation layer. This is the Karma or SourceCred model, but on-chain.

• Curators earn fees for good endorsements and lose stake for bad ones.
• Dynamic weighting: A whale's voucher carries more stake, not just more votes.
• Enables undercollateralized lending and trusted DAO working groups.

The intent-centric architecture of UniswapX and CowSwap requires a trust layer. Community reputation solves for 'who can fulfill this intent?' without centralized solvers.

• Reputation scores allow permissionless solver networks to form.
• High-reputation users get better rates and access to OTC deals.
• Bridge this to DeFi: A user's governance reputation could lower their loan-to-value ratio on Aave.

The new KPI for social protocols is Reputation Liquidity—the total value of economic stake backing a reputation graph. This is more meaningful than monthly active users or TVL for coordination layers.

• Measure: Total value staked in curation markets + slashing insurance pools.
• High RL protocols (e.g., Optimism's RetroPGF circles) attract higher-quality contributions.
• Invest in primitives that increase RL velocity: attestation markets, slashing insurance.

EigenLayer's restaking model is the perfect substrate for a cryptoeconomic reputation layer. Operators can be slashed for poor performance, creating a verifiable, financialized reputation for AVS operators.

• Reputation is accrued via successful validation across AVSs.
• Portable operator score becomes a critical input for Omni Network, Lagrange, and other cross-chain infra.
• Build AVSs that consume this reputation data for permissioning.