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We show how web3 communities can use on-chain, programmatic reputation systems to quantify the value of any particular individual to the community without compromising that individual’s privacy.

Introduction

This document is about web3 communities, such as:

  1. Blockchain validators (e.g. Bitcoin miners)
  2. DAOs (e.g. BitDAO)
  3. Guilds (e.g. YGG)

The potential and the power of web3 communities lies in openness and inclusion. Web3 communities can be more effective than traditional communities by allowing anyone who brings value to community to become a member. Regardless of their off-chain identity. Regardless of their ethnicity or gender or social class. Regardless of whether they are human or machine.

There are only two conditions for an individual to become a member of a web3 community:

  1. Does the individual wish to participate in the community?
  2. Does the individual’s participation in the community improve the community?

In theory, this should strip away all the inefficiencies and unnecessary gatekeeping associated with traditional communities. But this assumes that the community C has a tractable way to answer question (ii) for any particular individual I.

Unfortunately, it is impossible for web3 communities to answer question (ii) for completely anonymous, fresh accounts. Even if they had a method of quantifying the value that a community member brought to their community.

This is why so many web3 communities use identification services (such as Kryptosign) to ascertain the real-world identities associated with those accounts. Their assessment of the value that an individual brings to the community is based on evaluation of the real-world identity of that individual.

However, we believe that forcing potential community members to reveal their legal identities goes against the spirit of web3. Communities that impose such restrictions on their members are placing a limit on how much they can benefit from their use of blockchains.

This document presents an alternative to requiring that community members doxx themselves. We show how web3 communities can use on-chain, programmatic reputation systems to quantify the value to the community of any particular individual without compromising that individual’s privacy.

We present Moonstream Reputation, a free and open source implementation of such a reputation system.

Finally, we describe in detail how Moonstream DAO employs Moonstream Reputation, and how any other community may integrate elements of such systems into their own operations.