Reputation Graph

In peer-to-peer or OTC trading, reputation graphs provide transparent risk scores for wallet addresses. Traders and protocols can evaluate:

• Settlement history: Has this address failed to settle trades?
• Smart contract interaction safety: Does the wallet interact with known malicious contracts?
• Collateralization history across DeFi platforms.

Platforms like OpenSea for NFT trades or CowSwap for limit orders can use this to flag high-risk counterparties, reducing fraud and failed transactions.

DeFi lending platforms leverage reputation scores to offer credit-based loans without requiring full collateral. A user's graph—tracking factors like wallet age, consistent repayment history, and diverse protocol interactions—serves as a decentralized credit score. This enables capital efficiency and access for reputable users, moving beyond over-collateralized models. Protocols like Goldfinch and Spectral Finance pioneer this approach.

DAO governance is enhanced by weighting votes based on reputation, not just token holdings. A reputation graph can measure:

• Proposal participation history
• Successful execution of past delegated tasks
• Alignment with community sentiment This creates a meritocratic system where long-term, constructive contributors have greater influence, reducing the impact of whale manipulation and voter apathy.

Reputation graphs enable composable loyalty programs across different dApps. A user's positive reputation in one ecosystem—like being a long-term liquidity provider on Uniswap—can grant them access tiers, fee discounts, or enhanced rewards in a unrelated protocol, such as a gaming or NFT platform. This fosters cross-pollination and rewards consistent, positive participation throughout Web3.

Building a robust graph requires aggregating and weighting data from multiple sources:

• On-chain data: Transaction history, asset holdings, governance votes.
• Off-chain attestations: Verifiable credentials, KYC proofs (optional), social media links.
• Protocol-specific metrics: Liquidity provision yields, borrowing health factors. Zero-Knowledge Proofs (ZKPs) are often used to allow users to prove aspects of their reputation without exposing private underlying data.

A foundational security property ensuring a reputation graph cannot be easily manipulated by creating fake identities. Core techniques include:

• Proof-of-Stake (PoS) Bonding: Requiring a financial stake to participate.
• Proof-of-Personhood: Verifying unique human identity.
• Social Graph Analysis: Detecting clusters of coordinated fake accounts. Without Sybil resistance, reputation scores are meaningless.

The reputation graph's trustworthiness depends on the verifiable origin and immutability of its underlying data. This is achieved through:

• On-Chain Anchoring: Storing reputation state hashes on a blockchain like Ethereum for tamper-proof audit trails.
• Zero-Knowledge Proofs (ZKPs): Proving a user has a certain reputation without revealing the underlying private data.
• Decentralized Oracles: Securely importing verified off-chain behavior data.

A major threat where participants coordinate to artificially inflate or deflate reputation scores for profit. Mitigation strategies involve:

• Game-Theoretic Design: Structuring incentives so honest behavior is the most profitable Nash equilibrium.
• Decay Mechanisms: Implementing reputation score decay over time to prevent entrenched power.
• Anomaly Detection: Using algorithms to identify unusual voting or staking patterns indicative of collusion.

Balancing measurable on-chain actions with community sentiment. Objective metrics are verifiable facts (e.g., "completed 1000 trades"). Subjective metrics involve community judgments (e.g., "helpful forum moderator").

• Challenge: Subjective data is prone to bias and manipulation.
• Solution: Use decentralized identity (DID) and soulbound tokens (SBTs) to anchor verifiable attestations from credible entities.

Enabling reputation verification without exposing sensitive personal or transactional data. Key technologies include:

• ZK-SNARKs/STARKs: Generate a proof of a reputation score without revealing the underlying history.
• Secure Multi-Party Computation (MPC): Allows a group to compute a reputation function over their private data.
• Selective Disclosure: Letting users reveal only specific, necessary attestations (e.g., "over 21") instead of their full graph.

Managing how the reputation graph's rules and algorithms evolve without central control. Critical considerations are:

• Parameter Governance: Who decides the weight of different reputation signals?
• Fork Resistance: How does reputation persist if the underlying protocol forks?
• Kill Switches: Emergency mechanisms to halt a compromised system, balanced against decentralization goals. This often involves a decentralized autonomous organization (DAO).

The property of a system that prevents a single entity from creating multiple fake identities (Sybils) to gain disproportionate influence. Reputation graphs are a primary defense mechanism, as they attach a cost to building credible, verifiable history, making Sybil attacks economically unfeasible.

• Key Mechanism: Links reputation to on-chain actions and attestations.
• Example: A user must stake assets and complete verified transactions to build a score, preventing cheap identity fabrication.

A verifiable claim or statement made by one entity about another, recorded on-chain or in a verifiable credential. These are the edges in a reputation graph, forming the connections between identities and their attributes.

• Function: Encodes relationships like "DAO A attested that Wallet B is a skilled developer."
• Standard: Often uses frameworks like Ethereum Attestation Service (EAS) or Verifiable Credentials (W3C VC).

A self-sovereign identifier, such as a DID, that is owned and controlled by the user, not a central registry. It serves as the foundational node in a reputation graph, to which all attestations and historical data are anchored.

• Standard: Defined by W3C (did:ethr, did:key).
• Role: Provides a persistent, portable identity core that aggregates reputation across different protocols and applications.

A network mapping the relationships and interactions between entities, often derived from social media. A reputation graph is a specialized, weighted social graph where connections (edges) are enriched with trust scores, financial history, and verified credentials, not just social links.

• Contrast: A social graph shows "who follows whom." A reputation graph shows "who is trusted by whom, for what, and how much."

A traditional, centralized numerical representation of creditworthiness, typically for lending. In web3, a reputation score is a decentralized analog but is broader, potentially incorporating governance participation, protocol contributions, and on-chain payment history, not just debt repayment.

• Key Difference: Decentralized reputation is composable and user-portable, not locked within a single institution like FICO.

A mechanism to cryptographically verify that an identity corresponds to a unique human, often to prevent bots. This is a subset of reputation graph data. While proof of personhood establishes "is a human," a reputation graph adds "is a trustworthy human with this specific history."

• Examples: Worldcoin's Proof of Personhood, BrightID. These can be inputs (attestations) to a broader reputation system.