A Guide to DAOstack’s Initial Reputation Protocol

This article will bring Alchemy users and others familiar with DAOstack up to speed on the approach and mechanics of our initial reputation protocol, the starting point for reputation in the DAOstack ecosystem. If you’re not already familiar with blockchain-based decentralized governance systems or DAOstack, please start here.

In the initial protocol, a user’s Reputation score represents their decision-making power. Each DAO built on the stack has its own Reputation ledger that records the Reputation scores of users in that DAO. In any given DAO, the weight of a user’s vote, their “voting power,” is equal to their Reputation score in that DAO. Since any Ethereum address can be assigned Reputation, other DAOs can also be Reputation-holders, allowing authority to be flexibly distributed across sub-agencies or partner organizations.

The Approach

The Reputation system aims to help DAOs maintain and work towards a set of collective preferences or goals. To that effect, the protocol is designed to help Reputation flow towards users that further a DAO’s collective goals and away from users who don’t.

We’ve created an initial set of mechanics in an attempt to fulfill this aim, but we’ll be the first to admit that the current Reputation protocol is probably imperfect. So while this article is a guide to the current protocol, we encourage DAOs and those interested in DAOstack to build and share their own attempts at alternatives or improvements.

The Reputation system aims to help DAOs maintain and work towards a set of collective preferences or goals.

The Mechanics

Reputation mechanics in DAOstack’s initial protocol fall into two categories:

Manual Reputation Flow

• Executed proposals can grant or remove any amount of Reputation to or from an Ethereum address. DAO proposals can only be passed via DAO vote and may be the largest source of Reputation flow since reward amounts have no restrictions. Negative reputation rewards via proposal can also act as a failsafe for when the DAO feels an address has an inappropriately high level of Reputation.

Automatic Reputation Flow

These automatic mechanisms depend on parameters set by each DAO. The upcoming Alchemy Earth release will enable DAOs to adjust these parameters through the proposal submission process. In this way, DAOs can continually optimize their Reputation distributions to fit their goals, participation rates, and sizes, among other factors.

• Proposers receive an automatic Reputation reward if their proposal passes, because passing a proposal is assumed to contribute to the DAO’s collective goals in some way. Setting this reward to be larger relative to a DAO’s total Reputation will cause the DAO’s Reputation distribution to shift more quickly over time, while setting it to be smaller leads to slower change. As with all of these parameters, each DAO will decide for itself what’s appropriate (possibly even setting the parameter to 0).
• Voters on non-boosted proposals risk losing some of their Reputation if their vote goes against the eventual majority decision. This parameter, targeted at votes made early in a proposal’s life cycle, drives a DAO to be more coherent. A more coherent DAO produces more consistent and predictable decisions, which can be valuable for productivity and building organizational trust. Incentivizing coherence can also discourage the voicing of minority opinions, however, so DAOs will want to consider this parameter carefully.
• Similarly, voters on non-boosted proposals receive a Reputation reward if their vote goes with the eventual majority. This reward is a redistribution of the Reputation lost by minority voters on non-boosted proposals, and it is the mirror image of the previous mechanism, existing to promote coherence and consensus within DAOs.

Again, these mechanics are only a starting point for organizations built on DAOstack. The DAO stack can support any imaginable Reputation system, and we expect to see a diverse range of Reputation protocols built on the stack in the coming months and years.

Learn More and Get Involved

• Join our Discord community.
• Follow DAOstack on Medium, Twitter, or any of the other channels you’ll find on our website.
• Interested in joining the Pollinators, our official early-adopter community, and participating in the Genesis DAO? Read our onboarding guide.
• Want to start your own DAO? Find out more about the Community DAO program here.
• Developer? Check out the DAOstack Github, or jump into the stack with our friendly Hacker’s Kit.