Kaal claims by topic: reputation

518 atomic, individually citable claims from the published work of Wulf A. Kaal tagged reputation.

Qualified investors have strong incentives to accept valuation problems rather than contest them, because contesting would jeopardize their relationships with management and other industry participants and damage their own reputations. 2009
Raising the Regulation D numerical tests by adding an investable assets requirement would probably not address how to remedy investors' lack of understanding of hard-to-value assets. 2009
Germany's 2005 introduction of the derivative suit tightened the standard of care only partially, because section 148(1) of the AktG conditions shareholder standing on holding shares worth roughly 100,000 euros, a threshold with no U.S. counterpart. 2010
Building critical mass in the contingent capital securities market could require banks and other financial institutions to buy their competitors' contingent capital securities, which would raise ethical, antitrust and incentive concerns. 2012
The threat of bad press, reputational harm, legal costs, stock price declines, and the cost of implementing mandated governance changes can partly substitute for the weak direct incentives, pushing boards and management to optimize governance and keep the entity out of an agreement. 2014
Corporate wrongdoers are unlikely to prefer regulation by prosecution over regulation by legislation because prosecution and execution of an agreement carry large reputational implications. 2014
The market values N/DPA governance changes during the term because those changes effectively address the underlying corporate wrongdoing and its damage to goodwill and reputation while reducing the likelihood of continuing fines and litigation. 2015
In a multimanager series trust the board is largely independent of any adviser in the fund group, because the structure is centered on an unaffiliated administrator rather than on the sponsoring investment adviser. 2016
Despite open issues and possible shortcomings, the multimanager series trust structure appears to offer lasting substantive governance improvements for mutual funds. 2016
The cost savings of the multimanager series trust model are a confluence mechanism: they let a growing number of smaller hedge fund advisers reach retail investors by launching a mutual fund. 2016
New managers increasingly face contested track records, meaning the new firm cannot get a consensus from the manager's old employer about the manager's track record with that employer. 2017
Blockchain technology lowers transaction costs by eliminating intermediaries, and it substitutes immutability and cryptography for the trust that intermediaries previously supplied. 2017
The SEC's denial of the Winklevoss Bitcoin exchange traded fund on grounds of susceptibility to fraud reflects the agency's distrust of the crypto asset class as a whole, and especially of funds that trade digital currencies. 2017
Blockchain removes the reconciliation problem in private equity administration by letting every party to a deal view a single compiled version of the transaction and its associated data, instead of reconciling multiple copies of deal documents. 2017
The Northern Trust and IBM blockchain program removes the need for parties to reconcile multiple copies of deal documents by letting every party to a private equity deal look at a single compiled version of the transaction. 2017
Blockchain technology delivers anonymous and secure transactional guarantees through democratized trust and disintermediation, and its anti-discrimination features allow minorities and disenfranchised communities to benefit from the technology. 2017
By establishing a network of transacting parties that trust each other despite anonymity, blockchain technology enables unbiased transactions and eliminates prejudices against minorities. 2017
Reputational penalties for non-performance in a DAO are entirely free from racial implications because token holders are unlikely to even know each other. 2017
If the jurisdictional means necessary for conflict resolution mechanisms covering Ethereum blockchain based smart contracting are absent, consumers will mistrust the new technology, and that mistrust can undermine the evolution of the blockchain based crypto economy. 2017
Because no conceivable way exists to permanently hide an arbiter's reputation from the arbiter in an open system, the corruption risk created by high reputation arbiters becoming valued counselors for disputants is an insoluble problem with the authors' own proposal. 2017
Because whitepapers are not audited by any authority, the preliminary steps of the ICO roadmap, project announcement, executive summary, and investor comments, carry the burden of building market credibility and investor trust in the soundness of the project. 2017
Intermediaries, lawyers among them, are replaced by code, connectivity, crowd, and collaboration. 2017
For the parts of dealmaking and other legal tasks that cannot be placed on a blockchain, the role of non blockchainable agents of trust may expand, and blockchain driven disintermediation of law may itself create additional legal tasks requiring human lawyers. 2017
The delegation of technology policy to politicians advised by experts rested on public trust that has since eroded: consistent empirical evidence shows that trust in both government and experts has declined in recent years. 2017
Contesting the safety rationale offered for restricting Uber, the authors argue that the two way rating system and the algorithmic matching of drivers and customers already provide an effective means of policing drivers and ensuring a safe ride. 2017
Under MBCA Section 7.32 the ten year duration limit is only a default rule, unlike the corresponding limit for voting trusts, so parties who specify a longer term are permitted to have it. 2017
Duration ceilings contained in voting trust statutes do not carry over to other types of shareholder agreements, and courts have repeatedly sustained shareholder agreements intended to run indefinitely. 2017
A shareholder suing derivatively sues on the corporation's behalf and cannot convert the action into a personal one, even where the corporate injury has impaired the value of that shareholder's own stock. 2017
Where a shareholder agreement is folded into the charter or bylaws, it thereby becomes subject to whatever amendment procedure those documents or the statute provide, so charter integration exposes the arrangement to later modification. 2017
Platform companies embrace an unmediated, flat, and inclusive culture in which trust and value are generated through the platform itself rather than through the management of workers and physical assets. 2017
Inclusive and unmediated stakeholder relationships demand a much higher degree of cooperation, loyalty, and mutual trust than control-oriented, centralized, and vertical organizational forms do. 2017
The use of legalese and substantial involvement of the legal department in corporate communications substantially damages the originality and authenticity of those communications, making them mediated and less effective. 2017
The crypto economy can continue to develop without falling back on centralized regulating authorities only if two things exist: a system for evaluating reputation and trust, and a fair dispute resolution system that guarantees certainty of outcomes. 2018
Reputation value in any decentralized reputational system can be corrupted through three channels: direct purchase of reputation, automated worthless work, and degeneration of the system into a majority of inexpert opinions. 2018
The problems of corruption, Sybil attacks, and tyranny of the majority have plagued every previous autonomous decentralized reputation platform, so they are the design constraints any new architecture must meet. 2018
The novel element of the architecture is a dynamical evolutionary feedback system that ties an expert's reputation to their proof of ability and productive contributions, verified by validation pools that are generated by public fees sent to the system. 2018
When a fee bearing evidence of work post enters the platform, half the newly minted sem tokens are staked in the poster's name as an upvote bet and the other half are staked against the post and left unassigned, so the poster's only direct reward for off-platform work is a contested stake. 2018
The chosen expert is deliberately not paid directly out of the fee but only indirectly in newly minted tokens, because the architecture secures itself by making reputation more valuable than any one time payment. 2018
The platform is Sybil attack resistant because all power is weighted by reputation rather than by account: an owner of a single account holding 1000 tokens has the same or more power than an owner of 1000 accounts holding one token each. 2018
Reddit's upvote system imposes insignificant punishment for voting randomly, and this lack of cost compromises the informational value of an upvote, which is the failure mode a staked validation pool is designed to avoid. 2018
A 51 percent collusion that votes against common sense is visible in an open system, which erodes trust, reduces use and fees, and lowers the value of the attackers' own reputational salary, so the tactic can destroy an expertise tag but cannot enrich the attackers. 2018
Because absolute certainty is unavailable, the architecture substitutes a calculable probability of confidence built on verified reputation, which is enough for business to proceed even though no provably certain algorithm exists. 2018
The authors state plainly that in an open, decentralized and anonymous environment they provide no mechanism to stop the formation of sham expertise tags that copy a successful tag's record under a new name. 2018
Faking a reputable expertise tag is nearly costless: a successful tag's open record can be copied and reposted under a new name for the price of the anti denial of service fees, and the capital used to mimic fees paid into the sham tag is mostly recovered by the sham owners through the salaries they control. 2018
Reputation on the platform is not truly non transferable: accumulated sem tokens can be sold along with the anonymous identities that hold them, and the only check on this is the continued existence of a good faith majority that votes fairly in validation pools. 2018
As the system matures the power of experienced experts far outstrips that of new experts, which creates an entry problem in a platform where adjudicating disputes requires staking reputation one does not yet have. 2018
DAOs can replace the coordination and monitoring functions supplied by the firm, because they can measure each member's contribution to the finished work product more efficiently and allocate rewards accordingly. 2018
Semada is stipulated as an autonomous, decentralized, open source protocol on the Ethereum blockchain that enables domain specific reputation verification for human task crowdsourcing. 2018
The protocol lowers cost because it removes the manual verification step and the associated multiplication of micro task work that centralized systems require, letting decentralized workers capture the gains from disintermediation. 2018
Reputation tokens supply a staking mechanism that incentivizes high quality work and task completion by workers, and that simultaneously lets requesters verify and track worker quality, integrity, and quantity. 2018
The protocol architecture together with its incentive structure is what produces enhanced 51 percent attack resistance, which the author claims exceeds prior reputation verification attempts in both decentralized and centralized networks. 2018
Rather than repeating the same task across many workers to reach quality, the architecture verifies quality directly by examining and validating individual worker task performance through reputation verification. 2018
Staking creates disincentives for malicious actors, and it is this disincentive structure that makes the network both more efficient and attack resistant. 2018
Verifiers stake proportionally smaller amounts of reputation tokens than workers, because their higher reputation scores make them less likely to be malicious actors. 2018
Reputation scores clear the market on both sides: a low requester score makes workers less likely to accept that requester's offers, and a low worker score reduces the worker's likelihood of retention. 2018
Because requesters select workers by reputation score, workers acquire an incentive to keep their scores high by performing tasks with high accuracy and efficiency. 2018
The reputation score mechanism serves a discriminating function, separating malicious actors from simple mistakes and protecting workers and verifiers against fraudulent requesters and badly designed requests. 2018
Because the reputation token staking mechanism supplies attack resistance directly, users need not verify their identity to complete micro tasks, which circumvents the costs, delays, and privacy surrender attached to centralized identity verification and thereby enlarges the willing labor pool. 2018
Mechanical turk is only one application of the underlying reputation protocol, and further use cases that cannot presently be conceptualized will emerge over time. 2018
The result of this pattern is reputational: lawyers have developed a reputation as the least trusted of professions. 2018
Because blockchain network nodes verify, validate and audit transactions both before and after execution, the model is safer than a traditional one in which transactions can only be accomplished through third party intermediaries such as a bank, judiciary or notary. 2018
In a digital world trust can be embedded directly in software code, and recent interest in smart contracts suggests this will be a significant growth area in the near future. 2018
As machine to machine interaction becomes normal in an Internet of Things environment, trust ceases to be primarily a legal question and becomes a technical and design problem. 2018
A reputation verification platform matters because trust created through an eternal reputational record would be open to review and driven by proper incentives. 2018
Coders and developers do not always understand the industry or business environment they target with their software solutions, nor do they always consider the trust or ethical issues raised by the technology based business solutions they implement. 2018
Internet based platform businesses and distributed ledger technology businesses have not reached their full potential, and the core factor holding them back is worldwide decreasing trust in the internet together with under developed trust in decentralized technology solutions. 2018
Adding more regulations, processes and procedures cannot restore confidence in institutions, because the traditional trust and cohesion mechanisms have already reached their limits. 2018
Digitized and automated trust is not a stable substitute for institutional trust, because it is experiencing crises of its own that undermine the proliferation of value enhancing internet based platform businesses and distributed ledger technology businesses. 2018
The trust humans place in machines on the internet has never been verified, because neither centralized nor decentralized authentication engines have typically confirmed that trust or otherwise enabled a trusting environment for internet based transactions. 2018
Today's internet is designed for hierarchical societal structures on an underlying authoritative trust model, and that traditional hierarchical trust model carries many inefficiencies including serious cyber security vulnerabilities. 2018
Displayed net feedback scores are a poor reputation instrument because they encourage Pollyanna assessments of reputation and are far from the best predictor of performance available in the data. 2018
Every centralized reputation score can be sybil attacked, because fake internet accounts or fictitious ratings disrupt true reputation scoring. 2018
Users on internet based platforms earn their reputation but do not own it, so if a platform deletes an account, years of reputation data disappear and users have near zero ability to reclaim it. 2018
Financial and reputation scores are trapped in platform silos, and that data incompatibility undermines interoperability between platforms and leaves no way to aggregate a user's reputation across disparate platforms. 2018
Nobody has yet created a reputation engine that is genuinely resistant to Sybil attack and that cannot be corrupted regardless of the economics at stake, despite the many platforms that capture reputation. 2018
Reputation does not push a network toward centralization the way currency does, because reputation must be earned and can be lost yet cannot be turned into a fungible store of value exchangeable for goods. 2018
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. 2018
Meaningful and secure reputation tokens supply the incentives needed for secure proof of stake consensus in block production, which eliminates the unsustainable inefficiencies of proof of work based blockchains. 2018
Semada replaces fungible currency staking with reputation staking for block propagation, a consensus algorithm the authors call Semada Proof of Reputation. 2018
Under the Anchor Protocol, staking means anchoring reputation to a block, so a block producer whose block turns out to be invalid or is cancelled out suffers depreciation of their reputation. 2018
Because Semada's Anchor Protocol uses reputation scores as a non fungible currency to qualify for block propagation, the resulting proof of reputation consensus is attack resistant, fully decentralized, scalable, and open to evolutionary protocol upgrades. 2018
Block producers are selected pseudo randomly with weight proportional to their Anchor token holdings, so a participant with more reputation is more likely to be selected to produce a block. 2018
A successful Semada block producer wins half of the newly minted reputation tokens for a block while the remaining members share the other half for policing the block in the validation pool. 2018
A Web of Trust reputation system can be gamed with sockpuppet accounts, because an attacker can behave well for a while and then transact with himself repeatedly and rate himself high to raise his reputation arbitrarily. 2018
The other horn of the identity verification dilemma is that when reputation is not valuable, honest users will not bother to go through the hoops required to identify themselves securely. 2018
The Web of Trust is only trustworthy where the service is not valuable, such as essentially free PGP email, because only then is it not worth creating sockpuppet accounts. 2018
In an economic network where real money is at stake, historical good behavior cannot be assumed to prove future good behavior, because sockpuppet accounts allow participants to game the system automatedly, create valuable reputation falsely, and leach value out of the system. 2018
Sockpuppet accounts grow their reputation value much faster than honest users can in a Web of Trust, because sockpuppets validate each other, and the system is therefore flawed and should not be used where fungible currency is at stake. 2018
Because all block creation fees are shared with the whole group as a reputation weighted salary, SPoS removes the direct monetary reward for forming mining pools or block production cartels, which the authors identify as a decentralization threat that raises the likelihood of 51% attacks. 2018
Because the stakes in SPoS are reputation tokens that are far less fungible than cryptocurrency stakes, long term probity is incentivized and many short term arbitrage opportunities are eliminated. Fungibility of the staked asset is what makes short horizon attacks profitable in other proof of stake systems. 2018
Staking tokens with the potential for slashing is necessary to avoid the tragedy of the commons in a validation pool. Voting without something at risk does not produce honest evaluation of contributions. 2018
Experts who fail to participate in the validation pool are punished stably rather than abruptly: because the system is inflationary and they gain none of the newly minted sem tokens, their holdings become a smaller percentage of the total and earn a smaller share of future reputation weighted salaries. 2018
Finality in SPoS is measurable because forking away from a given block would cost the community all sem tokens created on the chain after it, and that quantity equals half of all fees sent since the block was produced. 2018
A malicious party using Sybil accounts cannot be prevented from cloning the structure of a successful proof of stake blockchain at far lower cost than cloning a proof of work chain, leaving a new user unable to distinguish the truly decentralized chain from a clone that has manufactured even more tokens. The authors answer that this is resolved off chain, by a trusted user interface, as with cloned web pages. 2018
Centralized, hierarchical organizations fail on two fronts in a fast changing environment: they adapt too slowly to changing reality and they are losing public trust. 2018
Peer-to-peer transactions are possible because a distributed consensus model has network nodes verify, validate and audit transactions before and after execution, and this is often safer than routing transactions through a single trusted third-party intermediary. 2018
Blockchain technology creates an independent and transparent platform for establishing truth and building trust, replacing intermediaries, bureaucracy and old procedures with what the authors call the four Cs of code, connectivity, crowd, and collaboration. 2018
A decentralized on chain precedent system makes reputation based DAO governance dynamic: a post or template that is increasingly referenced gains non fungible reputation weight and associated fungible salaries, while unused precedent dissipates over time. 2019
Reputation based staking removes the corruptive elements of fungible tokens from voting because third parties are less likely to be able to take over a non fungible asset that is organically grown and maintained through actual expertise in the DAO subject matter. 2019
Reputation based metrics were ineffective in centralized governance systems because before blockchain, reputation could not be stored autonomously, anonymously, and transparently, so it was not a reliable predictor of actors' future actions. 2019
Reputation based DAO governance turns a zero sum game into a positive sum game, because members are given incentives to build lasting non fungible value through a long term record of productive cooperation that improves the DAO. 2019
DAO member reputation should be designed as inflationary rather than as a permanent stock, so that non use such as non staking or non voting leads to value depreciation. 2019
Agency problems originate from the lack of trust between principals and agents, which itself stems from information asymmetries and agents' opportunistic self-interested behavior. 2019
Blockchain provides an alternative governance mechanism that eliminates agency costs, meaning the principal's cost of supervising agents, by creating trust in the contractual relationship between principal and agent. 2019
The immutability of the blockchain and its cryptographic security systems provide transactional guarantees that create trust between principals and agents in the integrity of their contractual relationship, and ensure that no participant can circumvent the rules embedded in blockchain code. 2019
Cryptographic hashes increase blockchain security and remove the trust barriers in agency relationships that otherwise require monitoring of agents and generate agency costs. 2019
Non-performance reputational penalties in a DAO are entirely free from racial or cultural biases, because the token holders imposing them are unlikely to even know each other. 2019
Without a decentralized human backstop to code, the immutability of the blockchain and its cryptographic security systems may not be able to create truly transactional guarantees and trust between principals and agents. 2019
Decentralized technologies increase consumer and market trust at unprecedented scale, which lowers transaction costs and raises confidence and certainty, thereby facilitating economies of scale that centralized structures may not be able to achieve. 2019
Reputation avoids the recentralization dynamic that afflicts currencies because it must be earned and can be lost yet cannot be converted into a fungible store of value exchangeable for goods. 2019
Decentralized reputation verification is the backstop for smart contracting: it makes mathematically rigid smart contracts more adjustable for business needs and validates smart contract templates, which raises counterparty trust and removes the need for costly back-testing. 2019
Increasing counterparty trust in decentralized commerce requires that the full history of transactions be openly viewable and verifiable, so that counterparties' actions endure as part of a public record and a meaningful precedence system. 2019
For any static set of rules in an infinitely repeated game using reputation stakes there is a way to subvert the rules for individual profit at the expense of the group, a result the author attributes to the Folk Theorems of game theory. 2019
eBay's user rating system, despite being its biggest competitive advantage, is clearly flawed, and the persistence of those flaws demonstrates the unmet need for a decentralized reputation verification system, since no better technology has yet been produced. 2019
Until blockchain technology arrived with Bitcoin in 2009, decentralized reputation systems rested on the roughly twenty five year old and corruptible concept of the Web of Trust. 2019
Decentralized reputation verification systems make mathematically rigid smart contracts more adjustable for the needs of business by serving as the backstop for smart contracting. 2019
Trust barometers such as the Edelman report show a radical depreciation of trust in centralized institutions between 2017 and 2018. 2019
Although smart contracting in decentralized systems is perceived as creating trust through preordained coded coordination without agency problems, decentralized commerce is equally afflicted with trust issues. 2019
Trust between counterparties in decentralized systems can only limitedly be assured by smart contracts, because the contract cannot verify the underlying qualities or future conduct of the parties. 2019
Smart contracts leave counterparty information asymmetries unresolved: the tenant of a smart property cannot fully know whether the landlord is providing a worthy property, and the landlord cannot know in advance how likely the tenant is to destroy the premises. 2019
Counterparty trust in the programmed parameters of a smart contract is more justified in simpler contracts, and specifically where the smart contract template has a history of successful executions. 2019
In more complex smart contracts the counterparties cannot fully know whether the contract will do what it was programmed to do, or whether it will contain bugs or follow a logic the parties did not anticipate. 2019
Solving the trust problem in decentralized commerce requires an intangible value system, not a further transferable store of value. 2019
Reputation used as a metric and store of value does not lead to centralization because it must be earned, it can be lost, and it cannot be converted into a fungible store of value exchangeable for goods. 2019
Reputation is the key ingredient that enables commerce, and it is precisely the ingredient that makes truly decentralized solutions possible. 2019
Centralized capitalist institutions have been built entirely around centralized and hierarchical reputation systems, which is why replacing them requires a decentralized reputation substitute. 2019
Until blockchain technology was introduced via bitcoin in 2009, decentralized reputation systems mostly relied on the old and corruptible concept of the Web of Trust. 2019
Decentralized reputation verification systems enable mathematically rigid smart contracts to become more adjustable to the needs of business, with reputation verification serving as the backstop for smart contracting. 2019
The rigorous code is law standard associated with smart contracting can be upheld while still gaining flexibility, because reputation verification operates at the level of smart contract template verification rather than altering contract execution. 2019
Validated smart contract templates increase trust for counterparties and remove the need for costly back testing and experimentation with smart contract templates. 2019
Truly increasing counterparty trust in decentralized smart contract based commerce requires that counterparties be able to review a long history of each other's conduct in decentralized commerce and of performance in earlier smart contracts. 2019
The required review of counterparty history is possible through a platform that creates reputation for both parties and for the smart contract itself, so reputation must attach to code as well as to persons. 2019
Similar business deals and contracts between counterparties must be organized and reviewable by the public, and the transaction history has to be fully openly viewable and verifiable so that parties can see that counterparties will perform as expected. 2019
A functioning decentralized reputation system requires that counterparties' actions in decentralized commerce endure and become part of a public record: their actions must stick and become part of a meaningful precedence system. 2019
The reputation tokens of the underwriting DAO are separate and distinct from the cash currency that insureds use to pay premia; the two must not be conflated. 2019
Tokens in the proposed DAO function as reputation because an agent's proportional token holdings will grow over time only if that agent follows sound and successful underwriting practices. 2019
The design's innovative features stem from tokens serving several purposes at once: as reward for risk taking and as a substitute for both reputation and capital. 2019
Trust requirements in the DAO are minimized by appropriately designed economic incentives rather than by intermediary reputation or regulation. 2019
The Northern Trust and IBM blockchain removes a specific inefficiency in private equity deal practice by letting all involved parties in a deal look at a single compiled version of the transaction and all data relating to it, rather than reconciling multiple copies of the deal documents. 2019
Because blockchain is transparent, verifiable, self-authenticating and self-enforcing, transactions can settle instantaneously at near zero cost, and it is this combination plus technology-driven democratized trust that drove the financial industry's large blockchain investments out of fear of obsolescence. 2019
Indirect regulation makes ex post opportunism by hedge funds less likely because the financial intermediaries, not just the funds, stand to lose reputation and market position if their counterparty risk evaluation proves insufficient. 2019
The authors recommend an SDAO governance design coordinated through reputation-weighted democratic governance, whose core objective is to create incentives that lead independent and selfish actors to collaborate productively toward a common goal. 2019
Blockchain's formal immutable guarantees, improved data ownership, transparency, network integrity, and data privacy together generate a form of trust that helps optimize both business and society. 2020
Trust created by law is often limited because it is only indirectly democratically legitimized, inflexible, untimely, resistant to change, dependent on fallible human centric decision processes, and constrained to human speed. 2020
Consumers increasingly favor genetically unmodified organic food from local and sustainable sources, yet the integrity of such products is usually difficult to verify, a verification gap blockchain technology can close. 2020
The transparency that blockchain offers can address the public's diminishing trust in traditional charities, because blockchain based giving allows donations to be tracked to their destination, kept anonymous or named, and freed of administrative cost or fee. 2020
Reputational penalties for non performance in a DAO are free from racial and cultural bias, because token holders are unlikely even to know one another. 2020
Reputation based staking removes the corruptive elements of fungible tokens because a third party is less likely to be able to take over a non fungible asset such as reputation that was organically grown and maintained through actual expertise in the DAO's subject matter. 2020
Paying DevDAO salaries in fungible stable tokens in proportion to members' non fungible reputation scores makes the economic benefit indirect, which removes corruptive elements and makes the governance design more attack resistant and stable over the long run. 2020
The reputation based DevDAO governance design creates a positive sum game, because members have incentives to build lasting non fungible value through a long term record of productive cooperation that improves the DevDAO itself. 2020
DevDAO member reputation is inflationary by design, so that non use, meaning failure to stake reputation tokens or to vote, causes value depreciation, which incentivizes action and makes liveness faults less likely. 2020
Reputation weighted salary distribution defeats sock puppet attacks, because a member who creates ten accounts holding one reputation token each ends up in the same position as one account holding ten reputation tokens. 2020
The DAO of DAOs uses a duality of internal and external governance: internal governance runs on reputation token staking, while external legal relationships are handled by a legal wrapper that represents the DAO of DAOs in real world legal contexts. 2021
Reputation based staking removes the corruptive elements of fungible tokens because third parties are less likely able to take over a non fungible asset such as reputation that is organically grown and maintained through actual expertise in the relevant subject matter. 2021
Reputation voting has two advantages over one token one vote: it is non fungible, which avoids corruptive elements, and it aligns incentives for members individually and for the institution as a whole at the same time. 2021
In the bifurcated DAO of DAOs token design, non fungible reputation tokens give members voting rights while fungible reputation salary tokens let members earn a salary in proportion to their non fungible reputation holdings. 2021
Paying members indirectly, through a fungible stable salary proportional to non fungible reputation, removes corruptive elements and makes the governance design more attack resistant and more stable over the long run. 2021
Reputation based governance creates a positive sum game because members have incentives to build lasting non fungible value through a long term record of productive cooperation. 2021
Member reputation is inflationary by design, so non staking of reputation tokens or non voting leads to value depreciation, which incentivizes action and makes liveness faults less likely. 2021
Superficial identifiers such as language, race, culture, social media profiles, and credit scores play less of a role in DAO of DAOs voting design, which allows inclusion of constituents who have no agency in centralized systems. 2021
Reputation weighted salary distribution solves the sockpuppet attack, because a member who creates ten accounts holding one reputation token each ends up in the same position as one account holding ten reputation tokens. 2021
Weighted keys are preferable to NFTs for reputation accounting because the smart contract itself holds the weights and each smart contract may require a different weight for the same key. 2021
Building effective and efficient DAOs requires three things together: a secure and meaningful reputation system, maximum bureaucratic transparency through a dynamic governance structure, and coherent transcendental values for long-term stability. 2021
The efficiency gain from cooperation in repeated games can only be achieved if a policeable reputation system exists: players must have histories and those histories must be available to other players, which makes transparency and communication essential to effective policing. 2021
Since no algorithm can be perfectly secure in all circumstances, protocol developers should redirect effort from proving algorithms correct to building a governance process that updates the algorithm as network circumstances change, rewarding protocol improvement with meaningful reputation instead of leaving attack as the profitable option. 2021
Cooperation is sustained only when the promise of future profits outweighs the present value of defecting, so a discount factor that is too low, or a game known to be ending soon, makes defection the rational choice. 2021
Anonymity increases rather than decreases the value of reputation tokens, because when potential business partners have less knowledge of a counterparty's identity, the number of reputation tokens held becomes the more important signal. 2021
The deterrent power of reputation tokens grows with network size, because the loss of opportunity from having reputation slashed increases as the network gets larger. 2021
Paying contributors in reputation tokens rather than fees, and then distributing all fees as a periodic reputation weighted salary, defeats the sockpuppet attack because splitting a holding across many accounts yields exactly the same share of fees. 2021
The value of reputation is directly related to how well punishment can be distributed in response to cheating, so a more transparent system produces more accurate and efficient policing and therefore more valuable reputation. 2021
Rating systems on centralized marketplaces are actively gamed: new Amazon sellers are solicited by sock puppet operators offering to inflate their ratings and attack competitors. 2021
Anonymity should be balanced rather than absolute: a member's power to broadcast should be tied to a pseudonymous account carrying meaningful and valuable reputation that is lost when the broadcasting power is abused. 2021
Applying the trust label to digital asset firms without an accompanying fiduciary duty is problematic, because the typical legal obligation of a trust company is to place customers' interests above its own. 2021
Becoming an OCC regulated trust is one route by which crypto exchanges can operate nationwide without securing state level licenses in each of the 49 states that require one. 2021
Where owners do not rely on the cryptography of the wallet and of each transaction to avoid trusted third parties, single points of failure, rent seeking behaviors and other suboptimal outcomes of legacy systems inevitably seep back into decentralized solutions. 2021
eBay's user rating system is visibly flawed and illustrates the need for a decentralized reputation verification system, yet no entity or individual has produced a better technology, and those decentralized ratings remained eBay's biggest competitive advantage. 2021
A decentralized human backstop to code is a core and often overlooked infrastructure requirement, because without it the immutability of the blockchain and its cryptographic security may not create genuine transactional guarantees or trust between principals and agents in the integrity of their contractual relationship. 2021
Meritocratic allocation of power in open source projects is often a fallacy, because rank can reflect timing and one-off contributions, deflation is not built into the perception of merit, and free riding on past reputation is therefore possible. 2021
Growth in connected IoT devices is offset by falling consumer confidence, because the sheer number of devices creates unprecedented cyber security exposure and attacks can be launched by unsophisticated parties at minimal cost with maximal potential damage. 2021
People increasingly substitute trust in machines, algorithms, and code for trust in organizations and procedures, but that reliance may be misplaced because the existing internet was designed for hierarchical societal structures on an authoritative hierarchical trust model carrying serious cyber security vulnerabilities. 2021
The decentralized economy cannot fully proliferate until it acquires the institutions ordinary commerce depends on, above all a secure and meaningful reputation system for anonymous supranational partners and an effective, dynamic governance system. 2021
Bundling transactions with zero knowledge proofs makes the scheme trustless, so users need not trust the bundlers: a malicious bundler cannot steal their data. 2021
Maintaining consensus without a central authority forces a reputation system to verify members' votes extremely redundantly, which imposes serious computational overhead. 2021
The application that decentralized banking improves most is not currency tokens but reputation tokens, because reputation transactions such as voting and resolving validation pools are generated by every meaningful action. 2021
Liquidity has always been a problem on decentralized exchanges because meaningful history and reputation cannot form where there is little or no governance structure, no insurance, no appeals process and no reputable decentralized news service. 2021
Decentralized insurance requires networks of policy writers carrying individual reputations, since efficient underwriting of every type of transaction depends on those reputations. 2021
Tokenization is meaningless unless the token is underwritten by someone who puts their reputation and ultimately their money on the line to attest that the token validly represents the asset. 2021
A decentralized chit fund can let people bootstrap financial security with no initial reserve backing, but only if the reputation system is strong enough to hold defaults to a low percentage. 2021
Reputation must be grounded to be meaningful, so reputation tokens should be minted only when policy premia enter the group, reputation should dictate power, and fees should be shared through reputation weighted salaries. 2021
Because underwriting mints new reputation tokens, passive holders see their proportional ownership in the DAO fall over time, which is designed to incentivize agents to underwrite actively while still allowing passive investors to earn income. 2021
Underwriters encumber reputation tokens against each policy under a preset formula, and if the insured event occurs they lose control of those tokens, which are auctioned to meet the claim, with new tokens minted and sold if the auction falls short. 2021
In the Underwriting DAO a breach occurs only when the market values the encumbered reputation tokens at less than the payout, which requires minting additional tokens to meet the claim. 2021
From the viewpoint of consumers and regulators, encumbered reputation tokens serve as a substitute for capital, because they derive their value from the DAO's future cash flows. 2021
Decentralized derivatives must be capitalized at least fully because the platform and its anonymous users cannot be trusted, a requirement that would be impossibly onerous in traditional markets and that leaves the market for decentralized options extremely shallow. 2021
The inability of anonymous participants to trust one another is crippling the DeFi market and forces decentralized markets into overcollateralization, giving traditional markets a fundamental advantage. 2021
Once secure and meaningful reputation is incorporated into Web3, the collateral imbalance will reverse, and because reputation tokens are more meaningful than identity and easier to value, less collateralization will be required than in traditional protocols. 2021
The decentralized economy still lacks trustworthy open source decentralized institutions for recording and parsing history, reporting news and guiding attention, without which the average person cannot judge which networks to join or what to invest in. 2021
Reputation changes the incentive structure of a decentralized organization from a single stage, zero sum game into a repeated positive sum game, which is why the authors treat reputation as the key to effective decentralized governance. 2021
A reputational system formally linked to profits makes members forward thinking and cooperative, counteracting the tendency of competition to separate them, and it also motivates members to self police their own past investments. 2021
Reputation can be objectively valued by estimating the probability of future business deals, taking the expected value of that probability, and computing the present value of those deals, which is what makes reputation function as a promise of future rewards. 2021