# kaal:claim:3266953-016

**Claim.** Putting the counterparties' reputation at stake reverses smart contracting's degeneration, because the opportunity to earn new valuable reputation tokens makes members act in ways that improve the platform over the long term rather than exploit short term arbitrage.

**Type.** mechanism  **Support.** argued

**Holds when.**

- reputation tokens that can be earned and lost

**Source quote.**

> This effect changes if reputation of the counterparties is at stake. With the opportunity to create new valuable reputation tokens, members strive to act in ways which improve the platform for the long term instead of exploiting short-term arbitrage opportunities.

**From.** Craig Calcaterra, Wulf A. Kaal, Gopinath Sivalingam, *Reputation Protocol for the Internet of Trust - Conceptual Whitepaper* (2018), Motivation, page 11

**Cite as.** Craig Calcaterra, Wulf A. Kaal, Gopinath Sivalingam, Reputation Protocol for the Internet of Trust - Conceptual Whitepaper (2018). SSRN: https://ssrn.com/abstract=3266953

**Verify.** sha256 of source PDF `781758dea356e55d79c73ad7f1debe7c83de398bd1cd9e0a9a6c2802f276b4c0` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Calcaterra%20et%20al.%20-%202018%20-%20Reputation%20Protocol%20for%20the%20Internet%20of%20Trust%20-%20Conceptual%20Whitepaper.pdf

**Topics.** reputation, risk-and-incentives, smart-contracts

**Keywords.** reputation-staking, incentive-design, smart-contracts, long-term-cooperation

**Related claims.**

- restates: https://wulfkaal.github.io/claims/3125827-005
- generalizes: https://wulfkaal.github.io/claims/3782217-011

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