A Novel Framework for Reputation-Based Systems

We’ve outlined some core principles of social token design, but it’s equally important to complement such designs with product-market fit that intrinsically motivates users. For example, a play-to-earn game that focuses its efforts on enabling users to profit but that doesn’t get the “play” element right misses the point: that games are, first and ... See more

Remember when it was easy for people to buy followers on Instagram? That made the follower count a much weaker measure of reputation, to the point that brands started looking for engagement metrics that were much harder to “buy.”

This presents a paradox: if a token can be transferred easily, then those without reputation can simply purchase it, which reduces the token’s ability to serve as a reputation signal.

For platforms where participation functions like employment, as with gig or creator platforms, the optimal strategy would be to distribute coins to point holders at a regular interval: for example monthly, or even daily. That means the users who make valuable contributions, thus maintaining a certain point level, receive a stable income.

To provide a form of compensation that enables contributors to liquefy some of the value they have created into an exchangeable currency.

In many crypto projects, the largest holders end up being just the people who were aware of the project earliest. But those early adopters are not necessarily the most valuable to the future of the ecosystem. So it is essential to maintain incentives for ongoing contributions and engagement. One natural way to achieve this in a two-token framework ... See more

Social capital shouldn’t be bought—but that doesn’t mean it can’t generate liquidity

That said, the platform may not have a clear sense of the contributions’ value, especially early on, so there needs to be a mechanism for experimentation and recalibration around token distribution.

So what if we instead separate transferability from the token itself? That’s why many games already split scores or points and coins or currency; it’s easy to imagine how spending your “score” could really backfire.