Can Ethos Network Boost Trust and Credibility in Crypto?

Within the Wild West of crypto, the place scams and fraud stay frequent, one group is betting on a novel resolution: bringing repute on-chain. Ethos Community, a platform designed to ascertain credibility and belief within the crypto house, is gaining traction because it tackles one of many trade’s most persistent issues—dangerous actors.

The brainchild of Trevor Thompson (aka Serpin Taxt) and Ben Walther, Ethos was born out of frustration with rampant scams plaguing the house.

“I used to do a number of buying and selling in crypto, and I witnessed a number of the crime, fraud, and scams which have turn out to be extra obvious in current cycles,” Thompson instructed Decrypt. “I felt impressed by the chance to unravel a few of that.”

The concept crystallized after Thompson’s expertise with Pal.tech, the since deserted social platform the place customers purchase and promote “keys” tied to Twitter accounts. Whereas Pal.tech launched the idea of tying on-chain actions to social id, it fell wanting addressing belief and credibility.

“Pal.tech was by no means making an attempt to unravel repute, nevertheless it felt prefer it was the primary perception,” Thompson stated. “What if we might tie somebody’s on-chain actions to who they’re as an individual, and doc that on-chain?”

Walther, Thompson’s co-founder and Ethos Labs CTO, has been combating fraud, scams, and cyberattacks since 2006 in his function as a safety skilled. Thompson approached Walther together with his concept for Ethos, sparking a collaboration between the 2. Their friendship initially shaped when Walther bought Thompson’s Pal.tech key and flipped it shortly thereafter for a 2x acquire.

Since then, they raised a $1.75 million funding spherical led by 60 Web3 group angel buyers together with 0xQuit, Dingaling, Sighduck, Dragos, 0xMakesy, and Zeneca.

From idea to actuality

Ethos, which launched in January, goals to create a “proof of credibility” system, instantly documenting belief by way of a vouching system. Customers can vouch for others by staking cash in opposition to their repute. The stakes will be withdrawn at any time

The Ethos web site places it merely: “Contribute and earn by constructing your repute, backing others or penalizing dangerous actors. Use the Ethos credibility rating to raised perceive who you possibly can belief and who to keep away from.”

Ethos contributors are assigned “credibility scores” based mostly on how reliable they’re, akin to credit score scores however targeted on social standing. The rating is decided by the platform’s most engaged and respected members.

“Pal.tech’s bonding curve muddied the information about who trusts whom,” Thompson defined. “We wished to create a system the place belief is instantly documented and economically safe, with out the pointless monetary draw back.”

The platform has drawn comparisons because the Price My Professors or Yelp for crypto. Thompson usually agrees, however sees it as one thing extra.

“Take into consideration how you purchase merchandise or select medical doctors in the present day—opinions and repute matter. In crypto, we’re all unbiased companies working with one another, and belief is important. With the ability to vouch actually provides weight to it.”

One early criticism of Ethos is the potential for a “circle jerk” impact, the place customers vouch for one another to inflate their credibility scores. Thompson acknowledges this threat, however argues that it’s a part of the method.

“You need individuals to vouch for one another—that’s the purpose. The purpose is to boost the bar for repute and separate credible individuals from bots and scammers.”

He addressed criticism for the “(3,3)” mannequin, also called “vouch for vouch,” in an X submit, writing that damaging opinions and slashing mechanisms exist to punish dangerous actors who attempt to manipulate the system.

The slashing mechanism is impressed by proof-of-stake blockchain networks, permitting customers to suggest slashing somebody’s credibility rating by staking their very own repute. If the bulk agrees, then the goal loses credibility factors.

“It’s a approach to maintain individuals accountable and make sure the system stays honest,” Thompson stated.

Constructing for the long run

Ethos remains to be in its early levels, with round 1,000 customers and a group of six builders. The platform is at present invite-only, a call the founders say is intentional.

“We need to develop it at a sustainable charge,” stated Thompson. “If we simply open it for everybody, then everybody would possibly be a part of after which we’d not retain any of these individuals—after which they simply will not take part sooner or later. It occurs loads in Web3 with hype cycles.”

Wanting forward, the group is exploring options like opinions constructed with zero-knowledge or ZK tech, which might permit customers to depart nameless opinions whereas nonetheless proving their credibility. “This might assist individuals share sincere suggestions with out concern of backlash,” Thompson stated.

The platform’s long-term imaginative and prescient extends past crypto, too. “Think about a world the place repute is transportable and verifiable throughout platforms—whether or not you’re hiring a contract copywriter, or making a peer-to-peer transaction,” Thompson stated. “That’s the long run we’re constructing towards.”

As Ethos continues to develop, it faces the problem of balancing openness with integrity. However for the group, the mission is obvious: to create a system the place repute is clear, verifiable, and on-chain. That is achieved by way of “backing repute by way of monetary safety, making repute itself inherently precious and in a position to be instrumented, measured, and rewarded.”

“The fact is, individuals aren’t desirous about the implications of their actions but,” Thompson stated. “However over time, as extra knowledge is saved on-chain, the reality will prevail.”

When requested the million-dollar query of whether or not or not Ethos is planning on launching a token, Thompson answered ambiguously, however assured that they’re working to reward customers ultimately.

“I can inform you that our XP system is designed to tell us in the way forward for how we’d reward individuals past simply XP,” Thompson stated. “It helps us perceive the suitable incentive mechanisms. and be sure that individuals are following these incentive mechanisms, balancing these incentive mechanisms.”

Token or not, in an area the place belief is commonly briefly provide, Ethos is betting that repute—backed by blockchain—would be the final forex.

Edited by Andrew Hayward