Why On-Chain Reputation Must Precede Tokenized Citizenship

Without persistent, costly-to-fake identity, every governance vote and airdrop is a race to the bottom. Uniswap's UNI airdrop saw rampant multi-wallet farming, while Optimism's OP distribution required multiple rounds of manual sybil filtering.\n- Cost of Attack: Near-zero for basic wallets.\n- Consequence: Diluted rewards, corrupted governance, and misallocated capital.

A wallet address is a pseudonym, not an identity. This breaks social primitives like one-person-one-vote, credit, and accountability. Protocols like Gitcoin Passport and Worldcoin are attempts to bridge this gap, but they create fragmented, non-composable silos.\n- Fragmentation: Reputation doesn't port across chains or dApps.\n- Opaque Scoring: Users can't audit or appeal their 'score'.

Today's on-chain 'reputation' is based on transient holdings (NFTs, token balances) or single-attestation proofs. This is easily rented, sold, or lost, providing no signal of long-term commitment or trust. POAPs are souvenirs, not credentials.\n- Lack of Stakes-in-the-Game: No skin in the game post-acquisition.\n- No History: A snapshot, not a longitudinal record of behavior.

Reputation must be built from a cryptographically verifiable trail of actions across protocols (e.g., consistent liquidity provision, successful governance participation, completed work in Coordinape or SourceCred). This creates a persistent identity graph.\n- Composability: Attestations are portable assets (e.g., EAS schemas).\n- User-Custodied: Individuals own and permission their reputation data.

A robust reputation system imposes asymmetric costs: cheap to earn honestly, expensive to fake at scale. This involves accumulating proof-of-work (real contributions) and proof-of-stake (locked capital) over time, similar to Vitalik's Soulbound Tokens (SBTs) vision.\n- Progressive Unlocking: Higher trust tiers require more time/effort.\n- Sybil Resistance: Cost of forgery scales with reputation value.

Reputation must be a public good infrastructure layer, not a walled-garden app. Think The Graph for querying, but for identity graphs. This allows any dApp (e.g., a DAO tool like Snapshot or a lending protocol like Aave) to plug in a shared, auditable reputation layer.\n- Protocol-Native: Built into the stack, not bolted on.\n- Universal Schemas: Standardized attestation formats for interoperability.

Token-weighted voting is trivial to game by splitting capital across wallets. Without a reputation layer, airdrop farmers and whales can dominate governance, turning DAOs into plutocracies or zombie networks.

• Example: A protocol with $1B TVL can have its governance captured by 100 wallets controlled by a single entity.
• Result: Proposals serve capital, not community, leading to value extraction and protocol stagnation.

Retroactive airdrops reward past behavior, but without a persistent identity, they create mercenary capital that exits post-claim. This drains protocol treasury and fails to bootstrap a sustainable community.

• Data Point: >60% of airdropped tokens are often sold within 30 days.
• Solution Path: Reputation systems like Gitcoin Passport or BrightID attach a persistent score to an identity, enabling rewards for continuous contribution, not one-off farming.

Most 'proof-of-personhood' systems rely on trusted oracles (e.g., government IDs, social logins). This reintroduces central points of failure, censorship, and excludes billions without formal identity.

• Risk: A KYC-based citizenship token makes the state your protocol's ultimate admin.
• Architectural Imperative: Systems must move towards decentralized attestation networks (Ethereum Attestation Service, Verax) where reputation is composable, portable, and oracle-minimized.

Making citizenship tokens liquid (tradeable) destroys their function as a reputation proxy. A whale can buy legitimacy, decoupling governance power from any proof of contribution or alignment.

• Observed Failure: $100M+ DAO treasuries have been drained by token-based attacks.
• Design Rule: Reputation should be soulbound (non-transferable). Liquid utility tokens can be derived from it, but core governance rights must be locked to the identity.

If every protocol builds its own isolated reputation system, users face massive onboarding friction. The value of on-chain history is fragmented, slowing ecosystem growth.

• Current State: Your Compound voting history is useless in Aave governance.
• Needed Primitive: A standardized, cross-chain reputation protocol (e.g., EAS schemas) that allows Uniswap, Optimism, and Arbitrum to read from a shared, user-owned attestation graph.

Pure token-based staking for access (e.g., NFT membership passes) measures capital at rest, not commitment. It creates a pay-to-play barrier that filters for wealth, not merit or community fit.

• Outcome: Homogeneous, capital-rich but ideologically weak communities vulnerable to coordinated exits.
• Superior Metric: Reputation systems can measure time-in-system, proposal authorship, and peer endorsements—signals of sticky, valuable membership.

Launching a governance token without on-chain reputation is inviting manipulation. Projects like Optimism's Citizen House and Arbitrum's DAO face constant Sybil pressure, diluting real community signal.

• Key Benefit 1: Reputation graphs (e.g., Gitcoin Passport, Galxe) filter noise by scoring real contribution.
• Key Benefit 2: Enables quadratic voting and conviction voting models that are actually meaningful.

Reputation must be a composable primitive, not a walled garden. Think ERC-20 for identity. This allows protocols like Aave to adjust loan-to-value ratios and Uniswap to customize fee tiers based on proven user history.

• Key Benefit 1: Ethereum Attestation Service (EAS) and Verax enable standard schemas for trust.
• Key Benefit 2: Unlocks under-collateralized lending and reputation-based gas markets.

Before issuing a citizenship NFT, users should be able to stake their reputation score for access. This creates a skin-in-the-game filter and a native revenue model for the reputation protocol itself.

• Key Benefit 1: Turns abstract social capital into quantifiable, liquid economic capital.
• Key Benefit 2: Creates a flywheel: valuable citizenship increases demand for accurate reputation oracles like Orange Protocol or Rabbithole.

Investing in a "citizenship token" project without a reputation stack is betting on a facade. The real value accrual is in the base-layer verification and data networks.

• Key Benefit 1: Infrastructure plays (e.g., EAS, Worldcoin's Proof of Personhood) have protocol-level moats.
• Key Benefit 2: Reputation data is a recurring revenue asset across countless applications, from DAO tooling (Snapshot) to DeFi (MakerDAO).