The Future of Organizational Trust: From Reputation to Cryptographic Proof

Off-chain reputation scores are opaque, non-portable, and easily gamed. They create centralized gatekeepers and fail under adversarial conditions.

• No Verifiable Proof: A 5-star rating doesn't prove you delivered the service.
• Fragmented Silos: Reputation on Amazon doesn't transfer to eBay or a DAO.
• Centralized Control: Platforms can arbitrarily de-platform or alter scores.

Ethereum Attestation Service provides a public good for making statements about anything, creating a portable, verifiable graph of trust.

• Immutable Proof: Cryptographic signatures create tamper-proof records of actions, credentials, or KYC.
• Composable Trust: Attestations from Gitcoin Passport, Optimism's Citizens' House, or a DAO can be reused across applications.
• Sovereign Identity: Users own and selectively disclose their attestation graph, breaking platform lock-in.

Enforcing agreements through courts costs $50k+ and takes 18+ months. This kills small-scale, cross-border collaboration and micro-transactions.

• Jurisdictional Hell: A Caymans DAO member sued in Delaware creates legal chaos.
• Prohibitively High Floor: You can't legally structure a $100 deal.
• Human Bottleneck: Resolution speed is measured in fiscal quarters, not blocks.

Decentralized dispute resolution protocols like Kleros provide fast, cheap arbitration enforced by cryptoeconomic incentives and smart contracts.

• Sub-$100 Disputes: Viable for micro-transactions and small-scale gig work.
• ~1 Week Resolution: Cases are resolved by crowdsourced jurors staking tokens on correct outcomes.
• Direct Enforcement: The ruling is executed by the smart contract, bypassing courts entirely.

DAO treasuries holding $10B+ rely on multi-sigs controlled by anonymous pseudonyms. This creates massive counterparty risk and operational paralysis.

• Security Theater: 5/9 multisig signers can be one person with 5 keys.
• No Accountability: Tracking fund allocation and spend efficiency is a manual nightmare.
• Slow Execution: Every transaction requires a full consensus call, killing agility.

Modular smart account frameworks turn treasuries into programmable entities with enforceable rules, not just shared wallets.

• Role-Based Permissions: Define rules like "$10k/month for marketing, no vote needed."
• Composable Modules: Integrate Snapshot for voting, UMA for price feeds, or Gnosis Safe recovery.
• Real-Time Transparency: Every action and its governing rule is immutably logged on-chain.

Smart contracts are blind. They require oracles like Chainlink or Pyth to feed them external data, creating a single point of failure. The trust model shifts from 'don't be evil' to 'don't get hacked'.

• $600M+ lost in oracle manipulation attacks (e.g., Mango Markets).
• Creates a meta-game of attacking data feeds instead of the core protocol.
• Re-introduces the very centralized trust we aimed to eliminate.

On-chain governance (e.g., Compound, Uniswap) trades agility for immutability. Protocol upgrades become political battles, and malicious proposals can drain treasuries.

• Voter apathy leads to sub-5% participation, enabling whale control.
• Speed of iteration drops from days to months, stifling innovation.
• The 'code is law' ethos breaks when the law is obviously stupid, forcing contentious hard forks.

Total transparency on a public ledger (e.g., Ethereum, Solana) enables unprecedented surveillance. Every transaction, salary, and deal is exposed, creating risks for individuals and enterprises.

• Zero financial privacy enables front-running, targeting, and regulatory overreach.
• Kills competitive advantage; business logic is fully visible to rivals.
• Forces reliance on fragile privacy mixers or complex ZK-proofs, adding cost and complexity.

Cryptographic finality is a bug, not a feature, for human-scale interactions. A bug, a typo, or a phishing attack leads to permanent, unrecoverable loss. Reputation-based systems allow for appeals and remediation.

• $10B+ lost forever to hacks and scams, with no recourse.
• Places ultimate burden of security on the end-user, a known failure point.
• Makes large-scale, high-stakes coordination (e.g., corporate mergers) legally untenable.

The 'money Lego' ideal creates tightly coupled, fragile systems. A failure in one protocol (Terra/LUNA, Iron Finance) cascades instantly across the entire DeFi ecosystem via interconnected lending and liquidity pools.

• Contagion risk is automated and near-instantaneous.
• Stress testing is impossible in a system of black-box smart contracts.
• Turns a contained failure into a systemic event, as seen in the 2022 DeFi winter.

Replicating consensus across thousands of nodes (Ethereum, Bitcoin) is inherently wasteful. The energy and capital expenditure required to prevent Sybil attacks is orders of magnitude greater than a trusted cloud provider.

• ~100 TWh/yr global PoW energy consumption, rivaling small nations.
• $30+ transaction fees during peak demand, pricing out micro-transactions.
• The economic model favors capital (stakers/miners) over users and builders.