The challenges with building a reputation in Web3 — and how to solve them

Amazing things are built in Web3 – often by pseudonymous people who prefer to keep their identities a secret in the real world.

In a way, that’s liberating. This means that everyone has the opportunity to get involved in a project and add value to the community – regardless of their background.

But as decentralized identities proliferate, there’s a problem that can’t be ignored: making sure there’s an easy way for us to check the reputations of others.

This is important… for many reasons. If you are about to use a DeFi project created by a pseudonymous person, you want to know that they are trustworthy and reliable.

When you read an article someone has written online, there should be a way to verify that their previous work was truthful and well received.

And when you buy an item from another user on a peer-to-peer marketplace, it’s important to verify that they’re delivering what you asked for — and on time.

All of this has made reputation a hot topic in Web3. Now several crypto enthusiasts are exploring this concept in great detail – giving us the proof we need to trust other people without knowing their names and background.

This could be a refreshing antidote to the status quo where not everything we see online can be believed. Fake product testimonials are a perennial favorite, while bots on Twitter can distort reality and our perception of people and businesses. We’ve even seen experiments where fake restaurants have skyrocketed to the top of TripAdvisor rankings.

Understand decentralized identities

As a concept, DIS is still in an early stage. But one day your crypto wallet could store far more than altcoins and NFTs. Instead, they could present a rich background of what you’ve accomplished—open to all to see. And while the profiles some of us carefully maintain on Facebook and LinkedIn are centralized, we would have full control over all of our data.

Ethereum co-founder Vitalik Buterin recently explained how this might work in practice when presenting proposals for “soulbound” NFTs. Known as SBTs, he paints a picture of how these digital assets could be used to represent everything from a college degree to a driver’s license – even providing a modern alternative to credit scores.

Buterin pointed to an attendance log as an example of technology that could also show promise. POAP NFTs can be used to show that someone was present at a specific event – such as a conference or concert. While this could have a plethora of exciting use cases in the future, there’s a problem that needs to be addressed: Since NFTs can be easily transferred, someone could instead just buy a token saying they’ve accomplished something – but products come that way on the market to prevent this.

As we find ways to dutifully record the achievements and attributes that make our reputation online, Buterin argues that a non-transferrable type of NFT needs to be created – and this could also lead to tangible improvements in the way governance is done achieved in decentralized autonomous organizations.

As you move away from technical limitations, you may be wondering why digital reputation is even necessary. Well, a big motivation has to do with how our data is currently fragmented across a range of social networks and websites – and difficult to transfer from one place to another. If you’ve earned a five-star rating on eBay after selling 50,000 items, that reputation doesn’t easily translate to Etsy.

reputation is power

Metis is one of the projects that focuses on these challenges. The platform has established reputation power earned through on-chain achievements. Users can accumulate RP by contributing to logs, DApps, and decentralized autonomous enterprises – be it through the use of smart contracts or minting NFTs.

For the years to come, the vision is to create an environment where a person’s reputation can easily be viewed in just one profile – bringing all aspects of life together, from loved ones and colleagues to the friends you share hobbies with share. It’s the ultimate way to demonstrate your credibility, commitment, and trustworthiness—and the contribution you’ve made to the causes you care about.

The project told Cointelegraph:

“Metis Reputation Power is a portable and composable reputation unique to users’ specific achievements and on-chain history. Reputation Power (or RP) can be accumulated by users performing on-chain actions such as: B. interacting with smart contracts or voting in governance.”

Recently, $100 million was set up to support projects looking to build on Metis – including DeFi protocols, NFT collections, Metaverse platforms, and gaming. And this could be attractive to developers, not least because this platform has some of the lowest fees of any Layer 2 blockchain – helping to make microtransactions affordable.

The beating heart of this ecosystem is a “solid, scalable, low-cost and decentralized” technical infrastructure called Smart Layer 2 – a secure environment that can cope with the growing demand of users, with the robustness that the Web3 economy deserves.

There’s so much to be excited about – and a lot of work to ensure that Reputation Power becomes valuable to businesses and consumers alike.

The focus remains on mass adoption and creating an infrastructure that will be used for generations to come.

As the project recently said, “Although the market is declining, builders may never stop!”