Elevator for Web-3. Why DAOs and their participants need reputation

7 min readJun 8, 2022

From a sci-fi novel, a weird gizmo, a crazy geek toy, just within a year, DAO has turned into a growing base of the cryptoworld. While it is still very young, green and complex, it is also inevitable. For example, there are several million traditional LLCs in the U.S. alone — the number of DAOs seems like a margin of error against that backdrop. The counting system of the profile organization Deepdao counts just under 5,000 organizations (with more than $10 billion in assets). Obviously, we are at the very beginning of a new decentralized infrastructure. YourJustice is working to help DAOs and their members integrate harmoniously into the web-3 world. Today we talk about how this can be done through the institution of reputation.

Our expert consultant is Marina Tyukalova, YJ product manager. She worked as a brand manager for one of the largest FMCG companies in Eastern Europe. Managed the brand and reputation, and then decided to create products for people herself.

Very briefly. What is DAO?

“Dao is eternal and has no name.” In Chinese philosophy, if to oversimplify, the dao means the moral path of a person.

In 2022 Google will probably give you another “right answer”. DAO is a decentralized autonomous organization, LLC for the inhabitants of the blockchain planet, a vending machine of the web-3 era, which will impartially execute the embedded algorithm, based on smart contracts, not on grudges or nepotism. If there is a community, tokenomics, and governance, so there is a DAO. But something is missing.

It seems to us — reputation.

“We want reputation to be a person’s main social capital.”

YJ is developing a transparent, decentralized platform where you can create your own laws, regulate disputes, effectively manage the community, and rate users by changing their reputation.

We have a prototype ready and it’s in an active testing phase right now (join in!). Each user has three rating scales: personal, professional and community. In the future each jurisdiction will be free to create their own gradations. There will also be an overall rating — Humanity.

Web-3 “souls”-profiles and their reputation

1.

— DAOs will be able to use reputation as a PR tool, — says Marina. — The market is still developing, but over time there will be many times more such organizations. DAO will have to compete for participants and promote themselves. The criteria will be trust, transparency and openness. Using a YJ widget you will be able to assess the values of the DAO, and how they are implemented — the history of all legal cases and the reputation of individual participants. And then decide whether to join the organization, or not, to trust it financially by buying DAO tokens.

Other similar organizations will also be able to rate DAOs, if they have somehow cooperated. Everything is like in our usual world. Perhaps there will be a separate jurisdiction exclusively for DAOs, a special rating scale for them with their own rules. DAOs will be able to show their reputation by posting a YJ reputation widget on their website, on their social networks, and/or on partner websites.

2.

— From our point of view, YJ is also a good HR tool for spotting new participants who fit the values of the DAO. That’s why we call YourJustice a marketplace of people.

3.

— With the help of our platform it will be possible to simplify and cheapen the use of different bounty programs, — continues Marina. — Often it is not clear what kind of contribution a community member has to make in order to get a reward. Thanks to YJ there will be transparent mechanics.

If we are talking about an organization that has decided to become decentralized, reputation can be used to solve the question of the validity of career advancement of employees once and for all. This is often all about personal relationships, but here it will be clear and open. If you gain a certain amount of points in the Junior Manager position, you’ll become a Middle Manager. And so on.

Generally we expect reputation to become the main social capital of an individual. Any citizen will be able to use it in the future in different areas of their life: when applying for a job, for networking, for other purposes. It’s like a CV for Web-3, available to everyone.
The desire to improve your CV, and therefore improve your reputation, will certainly be an additional strong motivation for members of the community. YJ is aimed primarily at such dynamics.

4.

— If we are talking about the interaction between DAOs participants, YourJustice can become an indispensable tool for resolving disputes. There will be transparent, сommon rules for all: there are some rules, violation of which will lead to some consequences. No subjectivity, it is the judge who will put an end to the conflict, and your rating will change in one direction or another with the opportunity to either appeal the decision or compensate for the reputation. Now we are thinking about how to organize this process.

I think blockchain justice will definitely be in demand. Right now DAOs are small — dozens, hundreds of people. There are few conflicts solved by the participants themselves during team meetings or with the help of moderators. But as communities grow, there will be more disputes. There will be a need to solve them decentralized and quickly.

5.

— Finally, YJ is easy for governance (DAOs will be able to clearly spell out the rules, including decision-making) and assess business risks. With the help of a reputation widget investment DAOs will be able to make investment decisions more easily: they will be able to understand whether this or that project is scam or not, how reliable its founder is, whether you should invest or not.

About doubts. Insurance against failures

The DAO story is pioneer, as is the decentralization story in general. In a recent episode of the YJ podcast we talked about Montelibero, a community project aimed at mass relocation of like-minded people to Montenegro and the formation of a community there. Montelibero participant Victor Korb talked about the community’s reasonable doubts about the transition to “full decentralization”.

— In Montelibero, not everything is organized with smart contracts yet. Although the benchmark is to make as many decisions as possible using modern democratic tools. At the moment, the main decisions are made by the board of signatories, the 20 accounts that have the largest packages of tokens. They have a multisig on them.

But the proportion of human “manual” influence on management systems is high. And so far it has paid off. Those who follow DAOs know that because of failures resources can be washed out. And you have to urgently activate centralized mechanisms to save the decentralized ones. At this point it is still an uncharted territory.

Elevator up. Or down

In May 2016, someone named Brantly Millegan tweeted that homosexuality is evil, abortion is murder, and contraception is perversion, got 13 likes, and that was that. Six years later, that message ruined his career. When the controversial tweet surfaced in February 2022, Millegan, by then Director of Operations of Ethereum Name Service, was fired. It’s no big deal, in the web-2 world people get “canceled” every day, but the nuance is that Brantly was a web-3 person.

The legal entity terminated his contract, but Brentley was also a member of the DAO organization, accumulated quite a few internal tokens, and when it came to voting to expel him, he voted for himself and won. Millegan’s story is now remembered in the media when talking about the unresolved contradictions in the work of “sinless” decentralized organizations. The question is simple: what if some powerful DAO token holder discredits himself?

The answer is probably in the clear rules and in the very social capital — reputation, which in the world of web-3 will be a predictable and convenient elevator up, but sometimes down. It will depend entirely on you.

Igor, CEO of CryptoMetaDAO:

— A jurisdiction, which allows you to gain reputation, provides a vertical elevator for the community. That’s why we want people from our DAO to create profiles on the platform and get reputation from other participants. In addition, within the DAO we can organize the realization of p2p services, and the reputation of the performer will be very important to ensure that the agreements are fulfilled. And if there is a scammer in the DAO, it will be very cool when people see it in their profile.