A social business card for the Web3 world of reputation tokens?

Rethink a question: in a community-oriented decentralized Metaverse, how should we better establish a reputation mechanism, a recognition mechanism, and a reward mechanism.

Reputation tokens, social business cards for the Web3 world?

Translator’s Note: Influence, activity, and participation (in order of priority) constitute the components and measures of personal reputation; status, privileges, and rewards constitute the positive feedback that personal reputation bestows on individuals. 

As “monkeys” living under a hierarchy, humans have an innate tendency to seek out a sense of belonging and identity. We are looking for ways to both fit in and stand out from the crowd. We traveled through a variety of communities and presented people in many different identities, learning how to navigate the different hierarchies flexibly.

Each community has its own specific hierarchy that dictates how members build reputation, accumulate social capital, and gain community recognition and rewards. In order to help members integrate into the community and have the opportunity to stand out, the community usually establishes a set of internal norms and sets up related “Proof of Membership” and “Proof of Participation”. Under the consensus mechanism (Proof of X), members can continuously accumulate social capital by showing “Proof of Ability”, “Proof of Activity”, etc. The “X” in “Proof of X” can be any compliant behavior, or any valuable contribution to the community and its vision.

Web3 will give a new and better solution to the problem of “how to establish a mechanism for the accumulation, recognition and reward of social capital”. Thanks to the nature of “decentralization”, the “Proof-of-X” consensus mechanism adopted by Web3 will not be decided by a single centralized platform or intermediary. The community can redefine a set of exclusive “Proof-of-X” mechanisms through negotiation. Through the use of tokens and smart contracts , this mechanism can be mapped to different reputation and reward models to ensure consistent incentive standards and maximization of total value.

It is true that reputation and status are two indicators of social class, but this is not a “zero-sum game”. There’s a gamification involved, though, where people are eager to improve their rankings in the community leaderboards and show other members their achievement badges. Furthermore, most communities do follow the 1/9/90 rule [1], that is, only a small number of people are making substantial, valuable contributions.

But I believe that the cross-cutting backgrounds and diverse skills of the members empower the community to grow. Flat communities can encourage more members to participate and achieve inclusive development by establishing a recognition and reward mechanism for their diverse contributions. Different from the special leaderboard or the one-dimensional point system, this mode can attract members to participate in more diverse activities, assume various roles, and obtain corresponding “badges”. The community recognizes badges or tokens as a “social signal” that signifies a member’s specific contribution or achievement. At the same time, they are also linked to some permissions and privileges. For example, some functions and benefits are only available to members who have reached a certain status or reputation level, and certain governance rights and identities are only open to active members and contributors, which essentially gives their higher status.

While these “reputation tokens” represent various contributions or achievements, what they have in common is that they are all non-fungible and non-transferable. The only way to earn these tokens is to work and contribute, and spending money to buy or trade them won’t work. They can neither be transferred to other members nor recycled into other communities, as the contributions and achievements they represent are based on the internal norms and hierarchies of each community. However, “reputation tokens” can also function beyond individual communities as a “social signal”.They are contained in social graphs and biographies, forming a decentralized, portable identity system unique to the Web3 world . When communities interact, they can define different values ​​and functions based on their membership levels and “reputation tokens”, respectively.

There is no one-size-fits-all formula for measuring value, but I tried to summarize a template that breaks down the metrics into three sections: Engagement, Activity, and Influence. After all, the potential social and financial value of any community can be evaluated using the “community activity” coordinate system, where the horizontal axis represents the breadth of the community (number of users), and the vertical axis represents user participation.

In the initial stages, the “active participation” of members can be counted as a valuable contribution. Usually, the activity of a project or platform is measured by daily activity (DAU) or DAU/MAU (the ratio of daily activity and monthly activity, which represents the relative activity of the community). Member participation – even if only “passive participation” – already communicates their interest and concern in the community and contributes to the overall impact of the community.

However, the collective strength of the community can only be maximized by stimulating “active participation”. There are many forms of “active participation”, but it usually starts from enhancing the connection between members and the community (such as participating in content output and internal communication), and then gradually allows them to independently create and co-create, and then actively participate in community output to jointly enhance the value of the community .

However, there are differences in the value weights for different activities, so the signal needs to be denoised. By establishing the correct formula in a smart contract, a reputation system can be built to autonomously identify activities of value and generate positive feedback defined within the community. In other words, the platform will issue points based on the value that members actually create. In such a reputation system, the value of influence is more weighted than activity, and activity is weighted more than participation.

In addition to helping members build reputation and earn tokens, the system is more important to maintain incentives for long-term and continuous contributors and active players. A depreciation mechanism needs to be introduced into any reputation points system, that is, in the process of building reputation and assigning value, influence, activity and recency of engagement are key weighting factors. Therefore, if there is a significant decline in the activity and participation of the members, the original status and all related benefits will be lost. The model is similar to a loyalty program in the real world: you only continue to earn rewards so that you can continue to enjoy the privileges.

So, is it possible to untie the non-homogeneous reputation and the homogeneous rewards, and let the community members share the created economic value? The dual-token system gives an understanding.

In the dual-token system, points and tokens coexist, and social capital can be mapped to financial capital and equity. The community recognizes contributions by issuing “rank tokens,” which can be viewed as an individual’s reputational signal, publicly visible to other members and the community. At the same time, the community will also distribute “reward tokens” which are homogenized rewards, which members can exchange for cash or other things they want, or for some additional privileges.

Under the combination of dual tokens, the platform can demonstrate recognition and incentives for the high-quality contributions of participants (such as content creation, review governance, community building and promotion). They build a dual incentive system that helps foster participation and co-creation. By issuing “reputation tokens” and “reward tokens” (both social tokens), members and creators will share the social capital and utility value they create. Tokenized communities will bridge the existing creator economy into a true ownership economy. Community members, consumers and fans alike can establish direct connections with their favorite idols, creators and brands, and share a piece of the pie in the collectively created value.

In a Web3 world, a decentralized identity system tracks each person’s movements, contributions, and achievements in the community (including URLs and IRLs), and forms an immutable record of “who we are” and “Where We Stand”. This means that our contributions in a certain community can be aggregated and applied to a wider range of scenarios.

In the era of decentralization, the interconnected reputation system means that users can utilize their accumulated reputation value across communities or platforms. However, due to different community structures, reputation mechanisms are mostly limited to their own autonomous ecosystems. If individuals’ identities and positions can be presented in a more three-dimensional and authentic manner, then reputation and social capital can also have the opportunity to achieve “arbitrage” across communities, platforms, and applications. To achieve this kind of interactivity, there needs to be a unified standard that allows people to display their collection of digital identities, and enables multi-factor analysis of multi-faceted biographical and reputation information.

All in all, people care more about “what you do” than about your appearance, race and gender. More importantly, here, as long as you make a contribution, you will have the opportunity to receive the recognition and rewards you deserve.

Reputation tokens, social business cards for the Web3 world?

[1] Translator’s Note: This hypothesis was put forward by Jakob Nielsen in 2006, which means that in an online community, 90% of the participants only watch the content without participating in the interaction, 9% of the users will participate in the discussion, and only 1% of the users will create content.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/a-social-business-card-for-the-web3-world-of-reputation-tokens/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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