“Decentralized Society: Finding the Soul of Web3” is the latest paper by Vitalik et al. This paper describes how to achieve a richer and more diverse ecosystem through soul-bound tokens, namely “Decentralized Society (DeSoc) and Critical Decomposable Property Rights and Enhanced Governance Mechanisms in a Decentralized Society”. Therefore, the DAOrayaki community translated this article and organized multiple Podcasts for in-depth analysis.

Summary

Today, Web3 is more about expressing transferable, financialized assets than an encoding of social trust relationships.However, many core economic activities, such as unsecured lending and building personal brands, are built on lasting, non-transferable relationships. In this paper, we illustrate how non-transferable “soulbound” tokens (SBTs) representing “soul” commitments, certificates and relationships encode the real economy’s web of trust to establish provenance and reputation. More importantly, SBTs can enable other and more application scenarios, such as community wallet recovery, anti-virus governance, decentralized mechanisms, and new markets with decomposable, shared rights. We call this richer, more diverse ecosystem a “decentralized society” (DeSoc) – a co-determined sociality in which “souls” and communities come together bottom-up as Emerging attributes of each other, co-create complex network goods and knowledge at different levels. Key to this sociality are decomposable property rights and enhanced governance mechanisms—such as quadratic funding discounted by relevance scores—that reward trust and cooperation while protecting the network from capture, extraction, and control. With this enhanced sociality, Web3 across social distancing can ditch today’s hyper-financialization in favor of a more transformative, diverse future, one that is constantly evolving.

§ Chapter 1 Introduction

In less than a decade, Web3 shocked the world by creating a unique and flexible parallel financial system never seen before. Fundamental elements of cryptography and economics, such as public key cryptography, smart contracts, proof-of-work, and proof-of-stake, bring a complex and open ecosystem to financial transactions.

However, the economic value of financial transactions is generated by humans and their relationships. Since Web3 lacks the foundational elements that represent this social identity, it is fundamentally dependent on the centralized Web2 structure that it seeks to transcend, thus replicating its limitations.

This dependency is reflected in:

1. Most NFT artists rely on centralized platforms like OpenSea and Twitter to promise scarcity and initial provenance.
2. DAOs trying to go beyond simple coin voting often rely on Web2 infrastructure, such as social media accounts, to resist Sybil attacks.
3. Many Web3 participants rely on custodial wallets managed by centralized entities such as Coinbase or Binance. A decentralized key management system is not friendly enough for anyone but a few geeks.

Furthermore, due to the lack of native Web3 identities, today’s DeFi ecosystem cannot support activities ubiquitous in the real economy, such as undercollateralized loans, or simple contracts like apartment rentals. In this article, we demonstrate that even a small step toward representing social identity with “soul-bound” tokens can overcome these limitations and move the entire ecosystem toward re-establishing a Web3 world that reflects native human relationships market has taken a big step forward.

Going a step further, we point out that native Web3 social identities, because of their rich social composability, can make great progress on broader long-term issues in Web3 around wealth concentration and governance vulnerability to financial attacks, while stimulating innovation. Cambrian explosion of political, economic and social applications. We refer to these use cases and the richer diverse ecosystems they enable as the “Decentralized Society” (DeSoc).

§ Chapter 2 Outline

We start by explaining the basic elements of DeSoc, which revolve around accounts (or wallets) holding non-transferable (initially public) “soul-bound” tokens (SBTs), representing commitments, credentials, and relationships. This token is like an extended resume, issued by other wallets that can attest to these social connections.

We then describe a “ladder” of increasingly powerful applications implemented in the social stack by these basic elements of DeSoc, including:

1. establish provenance
2. Unlocking the under-collateralized lending market through creditworthiness
3. Implement decentralized key management
4. Frustrating and counteracting coordinated strategic behavior
5. Measuring decentralization
6. Create new types of marketplaces with decomposable, shared rights and permissions

The culmination of this description is the vision of DeSoc – a co-determined sociality in which “souls” and communities come together bottom-up, as emerging attributes of each other, at different levels together to create composite network products, including composite intelligence.

Finally, we answer several possible concerns and objections and compare to other identity paradigms familiar in the Web3 space, acknowledging that our vision is only a first step, but still an advance in programmable privacy and communication.We then consider technical pathways to guide our imagined vision. On this basis, we look to a more philosophical point of view that DeSoc has the potential to redirect Web3 to a more profound, legitimate and transformative path.

§ Chapter 3 “Soul”

The key fundamental element we are talking about is an account, or wallet, that holds publicly visible, non-transferable (but possibly revoked by issuer) tokens [5]. We refer to accounts as “souls” and the tokens held by them as “soul tokens” (SBTs). Despite our strong interest in privacy, we initially assumed publicity because, as a concept, it was technically easier to verify, even if limited by the types of tokens people were willing to share publicly. Later in this paper, we introduce the concept of “programmable privacy” for richer use cases.

Imagine a world where most participants have “souls” that store SBTs, corresponding to a series of relationships, memberships, and credentials. For example, a person might have a “soul” that stores SBTs, representing educational credentials, employment history, or a string of hashes representing their writings or works of art. In their simplest form, these SBTs are “self-documenting,” similar to how we share information about ourselves in a resume. But the real power of this mechanism arises when SBTs held by one “soul” can be issued or attested by other “souls” who are counterparties to these relationships. These counterparty “souls” can be individuals, companies or institutions. For example, the Ethereum Foundation could be a “soul” that issues SBTs to “souls” attending developer conferences. A university can be a “soul” that issues SBTs to graduates. A stadium can be a “soul” that hands out SBTs to longtime Dodgers fans.

Note that there is no requirement that a “soul” must be associated with a legitimate name, nor is there any protocol-level attempt to ensure “one soul per person”. “Soul” can be a long-used pseudonym with a series of SBTs that is not easily linked to real people [6]. Nor do we assume that “souls” are not transferable between humans. Instead, we try to illustrate how these properties emerge naturally from the design itself when needed.

§ Chapter 4 The Ladder to a Decentralized Society

4.1 Art and “Soul”

“Soul” is a natural way for an artist to stake his prestige in his work. When issuing tradable NFTs, artists can issue NFTs from their “soul”. The more SBTs an artist’s “soul” carries, the easier it is for buyers to identify that the “soul” belongs to the artist, and thus determine the legitimacy of the NFT. Artists can go a step further and post a linked SBT in their “soul” certifying that an NFT is a member of that “collection” and vouching for any scarcity limits the artist wishes to set. As such, Soul will create a reliable, on-chain way to stake and build reputation on an object’s provenance and scarcity.

The scope of applicability extends beyond art to services, rentals and any market built on scarcity, reputation or authenticity. An example of the latter is verifying the authenticity of so-called factual records, such as photos and videos.As deepfake technology advances, direct inspection by humans and algorithms will become less and less able to detect authenticity. While the addition of blockchain allows us to track when a particular work was made, SBTs will allow us to track social provenance, providing us with a rich social context that allows us to understand the “soul” of the published work – their membership, A combination of relationships, credentials—and their social distance from the work. “High imitations” can be easily identified because these artworks are not produced in the corresponding temporal and social context, while credible artworks (such as photographs) are attested by well-known photographers. Whereas current technology decontextualizes cultural products (like pictures) and exposes them to uncontrolled viral attacks in the absence of social context, SBTs can recontextualize these objects and make the “soul” “Being able to leverage the trust relationships that already exist within the community as a meaningful backstop for protecting reputation.

4.2 The “soul” borrows

Perhaps the greatest financial value built directly on reputation is credit and unsecured loans. Currently, the Web3 ecosystem cannot replicate even a simple form of unsecured lending, as all assets are transferable and marketable, and thus can only be a simple form of collateral. The “traditional” financial ecosystem supports many forms of unsecured lending, but relies on centralized credit scores to measure borrowers’ creditworthiness, with little incentive for borrowers to share their credit history information. This score has many flaws. At best, they weight and de-weight factors related to creditworthiness in an opaque way and bias against those who have not accumulated enough data [8] – mainly minorities and the poor . At worst, they can manipulate Black Mirror-like “social credit” systems and reinforce discrimination.

An ecosystem of SBTs could create a censorship-resistant, bottom-up alternative to the top-down commercialized “social” credit system. SBTs representing educational credentials, employment histories, and lease contracts can be durably recorded as credit-related histories, allowing “souls” to pledge a good reputation to avoid collateral requirements and obtain loans. Loans and lines of credit can be represented as non-transferable but revocable SBTs, so they are nested within other SBTs of the “soul” – an indivisible collateral for reputation – until they are repaid and subsequently destroyed; or Better yet, replace it with proof of repayment. SBTs offer helpful security properties: non-transferability prevents transferring or hiding outstanding loans, while a rich SBTs ecosystem ensures that borrowers trying to evade a loan (perhaps by creating a new “soul”) will lack SBTs to meaningfully stake their reputation.

The ease with which SBTs can be used to calculate public debt will make lending markets more open. New correlations will emerge between SBTs and repayment risk, giving rise to better lending algorithms for predicting creditworthiness, reducing reliance on a centralized, opaque credit scoring infrastructure. Also, borrowing can happen in social connections.In particular, SBTs will be the basis for community lending practices similar to those pioneered by Muhammad Yunus and Grameen Bank, where members of a social network agree to support each other’s debts. Since all SBTs of a “soul” represent membership in different social groups, participants can easily discover other “souls” who will become important co-participants of the group lending program. Commercial lending is a “borrow and forget” repayment model, while community lending may take a “borrow and help” approach—combining working capital with human capital for a higher rate of return.

How does unsecured community lending come to fruition? In the beginning, we wanted “souls” to only carry SBTs with information they were willing to share publicly, such as information on a resume. Although limited in scope, this may be sufficient for intra-community lending experiments, especially if SBTs are issued by reputable institutions. For example, a combination of SBTs showing certain programming credentials, having attended several conferences and working experience may be an advantage for “souls” to get venture capital (or raise seed money) for them. Such credentials and social ties have informally played an important but opaque role in the allocation of capital such as venture capital.

4.3 Don’t lose your “soul”

The non-transferability of some important SBTs – such as one-time educational certificates – raises an important question: How do you avoid losing your “soul”? Today’s recovery methods, such as multi-sign recovery or mnemonics, have different tradeoffs in terms of mental load, ease of transaction, and security. Social recovery [9] is an emerging alternative method that relies on a person’s trusting relationship. SBTs allow for a similar, but broader paradigm: community recovery, where the “soul” is the cross-voting of its social network.

Social recovery is a good starting point for safety, but has several drawbacks in terms of safety and usability. A user curates a group of “guardians” and empowers them through the majority to change the keys to their wallets. Guardians can be a combination of individuals, institutions or other wallets. The problem is that users have to find a balance between having a relatively large number of guardians and ensuring that guardians are from unrelated social circles to avoid collusion.Additionally, guardians may die, relationships go sour, or simply lose touch, resulting in frequent, attention-consuming updates. While social recovery avoids a single point of failure, successful recovery depends on planning and maintaining a trusting relationship with the majority of guardians.

A stronger solution would be to tie Soul recovery to Soul membership in the community, without curating but maximizing broad real-time relationships for security. To recap, SBTs represent membership in different communities. Some of these communities – such as employers, clubs, colleges or churches – may be more off-chain in nature, while others – such as participating in protocol governance or DAOs – may be more on-chain in nature. In the community recovery model, restoring the soul’s private key requires the consent of a majority of members from the “soul” community (a random subset).

Like social recovery, we assume that “souls” have access to secure off-chain communication channels where “authentication” can take place – through conversations, face-to-face or sharing secrets. Such communication channels require greater bandwidth (theoretically the ability to carry richer “information entropy”) than the computation of on-chain bots or SBTs themselves. In fact, we can think of SBTs as fundamentally representing participation or access to this real (i.e. high bandwidth) communication channel.

Actionable details require experimentation. For example, how guardians are selected and how many guardians’ consent is required are key safety parameters that require further research. However, with such a rich repository of information, community recovery should be computationally possible, with increased security as “souls” join more diverse communities and form more meaningful relationships.

Community recovery as a safety mechanism embodies the identity theory proposed by the early 20th century sociologist and founder of social network theory, Georg Simmel, that individual identities emerge from the intersection of social groups, as Social groups emerge from the intersection of individuals as well. Maintenance and restoration of cryptoassets to Soul requires the consent of the Soul network. By embedding security in sociality, souls can always regenerate their keys through community restoration, which prevents the theft (or sale) of “souls”: since the seller needs to prove that the sale is a restoration relationship, any sale of “souls” Attempts lack credibility.

4.4 “Souldrops”

So far, we’ve explained how “souls” represent individuals and re-emerge their unique traits and group identities when they acquire SBTs, and thus their relationships, memberships, and credentials. Such personalization helps souls build reputation, establish provenance, enter unsecured lending markets, and protect reputation and identity. But the reverse is also true; SBTs also enable communities to be called together at unique intersections of “souls”. So far, Web3 has relied heavily on token sales or airdrops to rally new communities with little accuracy or precision. Airdrops, where tokens are algorithmically distributed for free to a set of wallet addresses, mostly fall into some combination of existing token holders and wallets, are vulnerable to sybil attacks, and encourage strategic behavior and Matthew effect [9]. SBTs have a radical improvement on this, which we call the “Soul” airdrop.

“Soul” airdrops are airdrops calculated based on SBTs and other tokens within “Soul”. For example, a DAO that wants to convene a community within a particular Layer 1 protocol could airdrop to developers holding SBTs with 3 attendances from the past 5 conferences, or other tokens representing attendance such as POAPs. The protocol can also programmatically weight the placement of tokens in various combinations of SBTs. We could imagine a nonprofit with a mission to plant trees throwing governance tokens into “souls” holding a combination of environmental action SBTs, gardening SBTs, and carbon sequestration tokens—perhaps to carbon sequestration token holders more tokens.

“Soul” airdrops can also introduce new incentives to encourage community participation. Airdropped SBTs can be designed to be “soul” bound for a period of time, but ultimately “vested” as transferable tokens over time. vice versa. Transferable tokens held for a period of time unlock the rights to SBTs, giving the protocol further governance rights. SBTs open up a wealth of possibilities to experiment with different mechanisms to maximize community engagement and other goals such as decentralization. We discuss further below.

4.5 DAO composed of “souls”

Distributed Autonomous Organizations (DAOs) are virtual communities brought together around a common purpose, coordinated through smart contract voting on a public blockchain. While DAOs have great potential for coordinating global communities, they are vulnerable to sybil attacks, where a user can have multiple wallets to accrue voting power, or in less sophisticated one-coin-one-vote governance, simply hoarding Tokens to accrue 51% of voting rights and deprive the other 49% of their holders.

DAOs can mitigate Sybil attacks by SBTs in several ways, namely:

1. Count a collection of “souls” of SBTs to distinguish unique souls from possible robots, and deny a suspected witch’s “soul” any voting rights.
2. Give more voting rights to those “souls” with more prestigious SBTs – such as work or education certificates, licenses or certifications.
3. Issue specialized “proof-of-personhood” SBTs, which could help other DAOs deploy resistance to witches more easily.
4. Check the correlation between the SBTs held by “souls” who support a particular vote, and apply lower vote weights to voters who are highly correlated.

The last idea of ​​correlation checking is particularly promising and innovative. A vote that is supported by many “souls” who share the same SBTs is more likely to be a witch attack, even if it is not a witch attack, such a vote is more likely to be made by a group of “souls” who have made the same mistakes in judgment or have the same prejudices, Therefore, it should be reasonably weighted compared to votes with the same amount of support but from a more diverse group of participants [7].

We explore this idea mathematically in more detail in the appendix, where we introduce a new foundational element called the “Relevance Score”. This concept of correlation discounts can be extended to structured prudential talks. For example, DAOs that are easily captured by the majority can calculate SBTs to maximize the grouping of diverse members in talks, ensuring that the voices of the minority are heard.

DAOs can also rely on SBTs to prevent some strategic behaviors such as “vampire attacks”. In this type of attack, a DAO—usually a related DeFi protocol with economic value—uses tokens to lure users’ liquidity into it by copying another DAO’s open-source code, plagiarizing others’ R&D results. The DAO could do this by first creating a norm around “soul” airdrops (perhaps holding specific SBTs), only airdropping “souls” that might resist Sybil attacks and providing liquidity, and then withholding those who divert their liquidity in a vampire attack Airdrop of “Soul”. The same mechanism does not work for wallet airdrops, as holders can spread liquidity across many wallets to obfuscate their liquidity traces.

DAOs can also use SBTs to enable leadership and governance to respond programmatically to their communities.Leadership roles can change dynamically as the composition of the community changes – this is reflected in the changing distribution of SBTs among members’ “souls”. A subset of members can be promoted to potential management roles based on their intersectionality and reach across multiple communities within the DAO. Protocols that value community cohesion can use SBTs to keep the “soul” at the center of the layer across the circle. In addition, DAOs can choose to make certain combinations of characteristics have a higher probability of entering the governance layer than others, such as diversity in zip codes or DAOs that span more diverse interests.

4.6 Measure decentralization from the perspective of Pluralism

When analyzing real-world ecosystems, it is best to measure how decentralized the ecosystem is. To what extent is the ecosystem truly decentralized, and to what extent is it “fake” and in fact dominated by a single person or a small group of common actors?

Two popular indicators of decentralization are the Nakamoto coefficient proposed by Balaji Srinivasan, which measures how many different entities need to combine to collect 51% of resources; and the Herfindahl-Hirschman index. – Hirschman index), a measure of market concentration in antitrust, calculated by summing the squares of market participants’ market shares. However, none of these approaches address the key questions of what is the right measurement resource, how to deal with partial coordination, and how to deal with the formation of a “discernable entity” grey area.

For example, nominally independent companies may have many common major shareholders, have directors who are friends with each other, or be regulated by the same government. In the context of token protocols, measuring the decentralization of token holdings by looking at on-chain wallets is highly inaccurate, as many people have multiple wallets, and some wallets (such as exchanges) represent many people . Furthermore, even if addresses can be traced back to unique individuals, these individuals may be socially related groups prone to accidental coordination (best case) or deliberate collusion (worst case). A better measure of decentralization should be able to capture social dependencies, weak ties, and strong identities.

Miners and mining pool operators, who make up 90% of all Bitcoin, sit together for meetings.

SBTs support a different way of measuring the level of decentralization (or diversification) in a DAO, protocol or network.

1. As a first step, the protocol could limit token voting to “souls” that are better resistant to Sybil attacks (or have more abundant SBTs).
2. In the second step, the protocol can check the correlation between the SBTs held by different “souls”, and if the “souls” share a large number of SBTs, discount their votes (to pool them and distinguish them individually). (We explore the latter idea in more detail mathematically in Appendix A, where we introduce a new underlying element called the “Relevance Score”).
3. As a third step, to amplify and understand the decentralization of the entire network, we can measure the correlation of SBTs held by “souls” at different levels of the network stack – measuring voting, token ownership, governance related communication, and even control over computing resources.

SBTs allow us to begin to measure the degree of decentralization of an interoperable and layered ecosystem, which is very difficult to measure today. There’s also the big question of what formulas best capture what we want to measure and are the least likely to be manipulated. We will have many questions about how to check the relationship between SBTs – giving some SBTs more weight than others, discounting nested SBTs, or taking into account the composition of transferable tokens within a “soul” . However, with a rich ecosystem of “souls” and SBTs, there will be more data to perform these calculations and move towards meaningful decentralization.

4.7 Compound Assets

DAOs typically own assets, or are organized around owning an asset, both in the virtual and physical worlds. So far, the scope of Web3 has been largely limited to a small class of property where all rights are fully transferable: tokens, NFTs, artwork, first editions or rare manuscripts like the U.S. Constitution, etc. But the emphasis on transferability works against Web3, making it unable to represent and support some of the simplest and most common property contracts today, such as apartment rentals. In the Roman legal tradition, property rights were considered to consist of rights to use (“usus”), consume or destroy (“abusus”), and gain (“fructus”). All of these rights are rarely jointly owned by the same owner. For example, an apartment lease grants the lessor a limited right of use (“usus”), but not the unfettered right to destroy the apartment (“abusus”), sell the apartment (“fructus”), or even assign the right of use (sublease). . Rights to immovable property (land) are usually subject to a series of restrictions on private use, the grant of public use rights, restrictions on the right to sell, or even the right to purchase through eminent domain. They are also often secured by a mortgage that transfers some financial value to the lender.

Future asset innovations are unlikely to be built on fully transferable private property as imagined so far. Instead, innovation will depend on the ability to decompose property rights to match the characteristics of existing property systems and to encode richer constructions. Corporations and other organizational forms have evolved precisely to restructure property rights in more creative ways—for example, allowing employees to use proprietary facilities (“usus”), but reserving managers the right to alter or damage assets (“abusus” ) while paying shareholders the most financial benefit (“fructus”). SBTs have the flexibility to represent and extend this nuanced property rights to physical and virtual assets, while encouraging new experimentation. Here are a few use cases:

1. Allow access to privately or publicly controlled resources (eg, homes, cars, museums, parks, and virtual equivalents).Transferable NFTs don’t capture this use case well, as access is often conditional and non-transferable: if I trust you to come into my backyard and use it as an entertainment space, it doesn’t mean I trust you to Sublicense this license to others.
2. Data Cooperatives [10], where SBTs grant access to data to researchers, while instantiating (perhaps through quadratic voting) the rights of members to grant access, and bargain for economic rights to discoveries and intellectual property arising from research . We’ll explore this further in Chapter 5, “Plural Sensemaking.”
3. Experiment with local currencies and make rules that make the currency held and spent by “souls” residing in a particular region or belonging to a particular community of higher value.
4. Experiments in engagement, SBTs create a sustainable base for lesser background “souls” (eg immigrants, adolescents) to gain influence in new and wider networks. Such souls will start with confined SBTs, connecting them with their families or local communities. As their relationships gradually diversify, they will acquire wider SBTs, thereby gaining voting power to influence a wider network – the spirit of Danielle Allen’s idea of ​​multinationalism [12] – a process currently governed by arbitrary age and place of residence.
5. Experiments designed by markets, such as Harberger taxation and SALSA (Self-Assessment License in Auction), in which asset holders publish a self-assessed price from which anyone else can buy the asset, And a tax proportional to that self-assessed price must be paid periodically to maintain control. SBTs can be used to create more nuanced versions of SALSA—for example, participation rights are approved by the community to reduce strategic behavior from within or outside the community.
6. Experiment with the design of democratic mechanisms, such as quadratic voting. Holders of SBTs, which represent community membership, can vote quadratically on parameters such as incentives and tax rates. At the end of the day, ‘market’ and ‘politics’ are not separate design spaces; SBTs can become a major part of a tech stack, allowing the entire space where these two categories intertwine to be explored. Another such intersection is the provision of public goods through quadratic fundraising, for example.

Of course, some utopian scenarios can also be considered. The immigration system can use immigrant SBTs for licensing.Regulatory capture can be achieved by nesting community tokens, where homeowners have a disproportionate number of votes the right to obstruct housing construction. SBTs can automatically redline. As we discuss further below, these situations should be considered in the context of currently opaque top-down licensing and discrimination. SBTs will make discrimination more transparent and therefore potentially questionable.

4.8 From private and public goods to composite network goods

More broadly, SBTs allow us to effectively represent and manage any asset or commodity that is somewhere between completely private and completely public. In reality, even goods consumed by individuals have positive spillover effects, just as they enable consumers to better contribute to households or communities, and even the most globally available public goods (e.g. climate) are unavoidable Land is more useful to some people than others (eg Seychelles to Siberia). Likewise, human motivations are rarely completely selfish or completely altruistic, and there will be many pre-existing modes of cooperation that are less in some communities and more in others.

However, today’s mechanism designs assume atomic, selfish agents with no pre-existing cooperation, which often leaves the mechanism vulnerable to innocent over-coordination [13]. Worst-case scenario is the deliberate collusion of already cooperating groups. Consequently, even the best public financing models, including quadratic financing (QF), cannot scale.QF encourages coordination by providing a reduced reward for the concentrated action of the minority, while providing an increased reward for the collective action of the majority. 10 people split the $1 for a $99 match, resulting in a total of $100, while the $10 donated by one person is not matched. Mathematically, this is done with funds that match the square of the sum of the square roots of individual contributions (which we elaborate further on in the appendix). However, even a weak partnership between large groups like (e.g. most citizens of China) (eg donating $1 to a cause) dominates the system and absorbs all its matching funds because QF has The number of unique contributors gives a premium. Just like now, QF does not discount the coordination between related special interests, which will not only cause the QF mechanism to malfunction, but also the relevant special interests will be rewarded.

But rather than viewing pre-existing cooperation as a mistake we should “rewrite”, the key is to acknowledge that it actually reflects a part of cooperation that we should capitalize on and compensate for. After all, we are in a business that encourages collaboration. The trick is to make quadratic mechanisms work with pre-existing cooperative networks, correcting their biases and tendency to over-coordinate. SBTs provide a natural way for us to tip the balance in favor of cooperation across differences. As Nobel laureate Eleanor Ostrom has emphasized, the question is not about coordinating public goods per se, but how to help communities of imperfectly cooperative but socially connected individuals overcome them social differences and scale coordination across wider networks.

If SBTs represent community membership relationships that reflect Souls/Soul cluster bias, then favoring collaboration across differences simply means discounting collaboration rewards for similar or related Souls/Soul clusters that are driven by their shared SBTs measure. The assumption is that consensus among different allies is better at creating composite goods that apply to a wider network, while consensus among similar allies is more likely to serve only over-coordination (or collusion) of narrower interests. )s product.

By revealing membership between different Souls/Soul Sets, SBTs allow us to discount pre-existing collaborations and expand quadratically in emerging networks, empowering composite items to a wider group of interests, And by the consent of diverse members, not by innocent over-coordinated (or deliberately complicit) special interest groups that give items narrow meanings. The exact formula for the “best” correlation discount depends on the model details and has not been studied, but we provide first-hand data from experiments in the appendix for further study.

§5 Compound meaning construction

An example of a variety of online goods that are increasingly prominent in the digital world are predictive models built on user data. Both artificial intelligence (AI) and prediction markets attempt to predict future events based on data obtained primarily from users. But both paradigms are limited in different and almost opposite ways. The dominant paradigm in AI eschews incentives and instead collects data feeds (public or privately surveilled) and synthesizes them into predictions through proprietary large-scale nonlinear models, which consistently leverage the default web2 pair “usus” There is a monopoly and no “fructus” is attributed to the data workers.

Prediction markets take the opposite approach, with people placing bets on outcomes in the hope of financial gain, relying entirely on the economic incentives of financial speculation (“fructus”), without comprehensively analyzing bettors’ beliefs to produce composable models. At the same time, the conclusions produced by both paradigms are described as “objective” truths. AI models are described as “universal” or “universal intelligence,” while prediction markets are described as summarizing all the beliefs of market participants into one number: the equilibrium price.

A more productive paradigm is to eschew these extremes and draw on the strengths of both, while making up for their weaknesses to make them richer in breadth. We propose to combine the complexity of nonlinear AI models with the market incentives of prediction markets to transform passive data workers into active data creators. With this rich information rooted in the sociality of the data creators, DeSoc is able to unleash a composite intelligence network that is more powerful than either method.

5.1 From prediction markets to compound predictions

Prediction markets are designed to aggregate beliefs based on wealth and risk appetite from those willing to bet. But this “survival of the fittest” is not an ideal way to aggregate beliefs. In a zero-sum game, where one trader’s gain is another’s loss, it assumes that a general predictive power is fought against “smart people” rather than “dumb people.” While wealth may be a proxy for certain abilities and expertise, predictions of other forms of related expertise may be more reliable.Participants who lost bets in one area may have more accurate beliefs in another area. But prediction markets have the unfortunate effect of creating belief in those with a propensity to gamble, making those who win bets rich, making others poor, and preventing widespread participation by the risk-averse.

There are better ways to inspire belief. Research has shown that while prediction markets often outperform simple surveys, they are not better than complex team prediction surveys, which give people an incentive to share and discuss information. Under the team deliberation model, where members can weigh based on factors such as past performance and peer reviews, the team engages in semi-structured discussions to bring together information that cannot simply be encapsulated in a buy-sell contract. Such team deliberation models can be further improved by the quadratic rule in order to obtain accurate probability estimates from all participants (in contrast to prediction markets, which can only obtain up and down views about the current price balance) [14]. It has been shown that the number of contracts people are motivated to buy reflects their subjective assessment of probability. [15] Such a market would also distribute the gains from participation more equally, rewarding the right people without bankrupting others, making everyone a participant in future rounds.

SBTs can unlock a new class of rich models and experiment with predictive power and relative expertise. Prediction markets come up with just one number, the price of the contract, and quadratic voting gives each participant’s exact belief in the probability of an event. SBTs are able to further compute these beliefs in the social context of participants’ educational credentials, membership, and general sociability to develop better weighted (or non-linear integrated) predictive models, which are likely to emerge in new, unforeseen circumstances A new generation of expert forecasters emerges at the intersection. So even if polls don’t do a good job of gathering beliefs, polls can be studied retrospectively to reveal the characteristics of “more correct” participants, and to call in more targeted “experts” in future polls , perhaps in the context of a deliberative team. These mechanisms are closely related to those we advocate in this paper. A quadratic mechanism discounted by correlation scores can transform poorly coordinated top-down public goods into powerful, bottom-up composite network goods. Likewise, they can transform governance systems based on zero-sum prediction markets into more decision-making in a positive-sum sense, encouraging the revealing and synthesis of new, better information.

5.2 From artificial intelligence to compound intelligence

Large-scale nonlinear “neural network” models such as BERT and GPT-3 can also be transformed by SBTs. Such models leverage large amounts of publicly or privately monitored data to generate rich models and predictions, such as codes based on natural language cues. Most surveilled data creators are unaware of their role in creating these models, retain no residual rights for themselves, and are seen as “incidental” rather than key players. Furthermore, data collection takes models out of their social context, which masks their biases and limitations and diminishes our ability to compensate for them. These contradictions have come to the fore as demands for data availability have grown, and new initiatives, such as “data collection tables” that document the provenance of data, and privacy-preserving laws for machine learning, need to be accessible to those who generate the data. With meaningful economic and managerial benefits, and incentivize them to collaborate to produce models that are more powerful than the models they built alone.

SBTs provide a natural way to develop economic incentive programs for richly sourced data, while giving data creators residual governance over their data. In particular, SBTs allow for careful and targeted incentivization of their data (and data quality) according to the characteristics of individuals and communities. At the same time, model makers can track the characteristics of the collected data and its social context, as reflected in SBT, helping to find contributors who can counteract bias and compensation limitations. SBTs can also provide data creators with bespoke stewardship, allowing them to form cooperatives, pool data and negotiate its use. This bottom-up programmability of data creators enables future compound intelligence, where model makers compete to negotiate how to use the same data to build different models. So we move away from a stand-alone, monolithic “artificial intelligence” paradigm that is decoupled from human origins, centralizing surveillance data without provenance, and moving to a Cambrian of collaboratively constructed composite intelligences rooted in society And ruled by Souls/Soul Clusters.

Over time, just as SBTs individualize Soul/Soul clusters, they also individualize models. Embed data provenance, governance and economic rights directly into the code of the model. So multiagents, like humans, build a soul embedded in human sociality, and over time humans are embedded in multiagents, each with a unique soul that complements the others and cooperation. And, at this point, we see a fusion of prediction markets and AI paradigms, moving together in the direction of compound meaning construction. Combining widely distributed incentives and careful tracking of social context creates diverse models that combine the best of both approaches into a technological paradigm that is more powerful than either.

5.3 Programmable Composite Privacy

Composite agents raise important questions about data privacy. After all, building such powerful agents requires pooling data across individuals from large datasets (such as health data), or capturing data that is not interpersonal but shared (such as social graphs). Advocates of “self-sovereign identity” tend to treat data as private property: because the data for this interaction is mine, I should be able to choose when to disclose it to whom. In terms of simple private property, however, the data economy is even less understood than the real economy. In a simple two-way relationship, such as an extramarital affair, the right to disclose information is usually symmetric and usually requires the permission and consent of both parties. As the scholar Helen Nissenbaum has emphasized, the concern is not “privacy” per se, but rather the lack of a complete understanding of the context in which the information is shared during information sharing. The “Cambridge Analytica” scandal is mainly about people leaking their social graph attributes and friend information without their friends’ consent.

Rather than thinking of privacy as a transferable property right, a more promising approach is to think of privacy as a programmable, loosely coupled bundle of rights that allows information to be accessed, changed, or profited from. Under such a paradigm, each SBT (such as an SBT representing a credential or accessing a data store) would ideally also have implicit programmable property rights and be able to control some of the basic information that constitutes the SBT, such as the holder, their agreements between them, shared property (such as data), and obligations to third parties. For example, some issuers will choose to make SBTs fully public, but some SBTs, such as passports or health records, will be private in the sense of self-sovereignty, and Souls/soul clusters carrying SBTs have the right to unilateral disclosure. Others, such as SBTs that reflect membership in data cooperatives, involve multi-signature or more complex community voting rights, and all or most SBT holders must agree to make disclosures.

While there are currently technical questions such as (Can SBTs be programmed in this way?), and important questions around incentive compatibility (explored further in Section 7), we still believe that programmable composite privacy is worthwhile Further research, and provides key advantages of an alternative to the existing paradigm. According to our approach, SBTs have the potential to make privacy a programmable, composable right that can be mapped to the complex set of expectations and protocols we have today. Furthermore, this programmability can help us re-architect new configurations, as there are countless ways in which privacy as a right to allow access to information can be combined with “usus”, “abusus” and “fructus” to create a subtle access rights cluster. For example, SBTs can allow computations on data stores (possibly owned and managed by multiple Souls/Soul clusters) using specific privacy-preserving techniques. Some SBTs may even allow access to data in a way that does certain calculations, but the results cannot be proven to a third party. A simple example is voting: the voting mechanism needs to count the votes for each Souls/Souls cluster, but the votes should not be proven to anyone else to prevent the purchase of votes.

Communication is perhaps the most typical form of sharing data. However, today’s communication channels both lack user control and management (“usus” and “abusus”) while auctioning off the user’s attention (“fructus”) to the highest bidder, even a bot. SBTs have the potential to manage a healthier “attention economy”, giving Souls/soul clusters the ability to filter spam from outside their social graph, possibly even bots, while enhancing communication from real communities and desired intersections. Listeners can more clearly know who they are listening to and can better assign credit to works that inspire insight. This economic model is not optimized for maximizing user stickiness, but for creating more valuable common goals through positive-sum collaboration. This communication channel is also important for security. As mentioned above, “high-bandwidth” communication channels are critical to helping communities build a secure foundation.

§6 Decentralized Society

Web3 hopes to transform society broadly, not just the financial system. However, today’s social structures, such as family, church, team, corporation, civil society, celebrity, democracy, etc. keywords, if in the virtual world (often referred to as the “Metaverse”) of the wider relationships they support, Aboriginal people have nothing to represent the human soul, so all this is meaningless. If Web3 eschews persistent identity, trust and cooperation models, and composable rights and permissions, we will see all of these over-financialization trends, respectively, Sybil attacks, collusion, and fully transferable private property in limited economic domains .

To avoid over-financialization while unleashing exponential growth, we propose to enhance and bridge our sociality in both virtual and physical reality, endow Souls/soul clusters and Communities/community clusters with richer coded social and economic relationships. However, it is not enough to build on trust and cooperation. Correcting biases and over-coordination (or collusion) tendencies in trust networks is critical to encouraging more complex and diverse social relationships than ever before. We call this a “Decentralized Society (DeSoc)”: a co-determined sociality in which Souls/Soul Clusters and Communities Clusters are brought together bottom-up as emerging properties of each other, spawned at different scales Composite web items.

We emphasize that composite network items are a feature of DeSoc, because the network is the most powerful engine of economic growth, but also the most easily captured by private actors (such as Web2) and powerful governments. Most significant economic growth comes from increased network revenue, where each additional unit of input produces more output. Examples of simple physical networks include roads, power grids, cities, and other forms of infrastructure, which are built with labor and other capital inputs. Examples of powerful digital networks include markets, predictive models, and composite intelligence built on data. In both cases, network economics differs markedly from neoclassical economics, which emphasizes diminishing returns, that is, with every additional unit of input, output diminishes, and private property yields the most efficient outcomes. The use of private property in the case of increasing returns will have the opposite effect, resulting in the phenomenon of restricting the development of the network by extracting rents. A road between two cities could unlock increasing returns from trade gains. But the same private ownership of roads can stifle growth if landlords choose to extract rents in trade between the two cities. Public ownership of the network has its own perils of being caught by regulators or underfunded.

Having increasing returns is most effective when the network is viewed neither as a purely public nor purely private good, but as a partial and composite public good. DeSoc provides a social basis for disaggregating and reconfiguring rights – the right to use (“usus”), the right to consume or destroy (“abusus”), and the right to benefit (“fructus”) – and to make these rights effective Governance mechanisms can enhance trust and cooperation while checking for collusion and capture. We explore several mechanisms in this paper, such as community-based SALSA and discounted quadratic funding (and voting) for related scores. This act of making compound ownership a third way avoids Charybdis for private rent and Scylla for public regulation.

In many ways, DeFi today is a private property model of diminishing returns transformed into a network of increasing returns. Built on a premise of distrust, DeFi is inherently limited to the realm of fully transferable private property (e.g., transferable tokens), which are largely tied to “usus,” “busus,” and “fructus.” At best, DeFi risks stifling network growth by charging rents, and at worst, it could lead to a dystopian surveillance monopoly, dominated by “whales” who harvest and absorb in a race to the bottom data, just like Web2.

DeSoc turns the DeFi race to control and speculate on network value into bottom-up coordination to build, participate, and govern the network. At the very least, the social foundation of DeSoc can make DeFi anti-witch (supporting community governance), anti-vampire (internalizing positive externalities to build open-source networks), and anti-collusion (keeping the network decentralized). With the structural revisions of DeSoc, DeFi can support and expand diverse networks, broadly conferring benefits, as most different members agree, rather than further consolidating networks controlled by narrow interests.

However, DeSoc’s greatest strength is the composability of its network. The ever-increasing returns and growth of the network do not simply avoid the danger of extracting rents, but also encourage the proliferation and intersection of nested networks. A road may form a network between two cities. But if cut off from broader cooperation, the two cooperating cities would end up with a ceiling of diminishing returns — either because of congestion (roads and housing) or depletion (reaching the limits of the people they could serve). Only through technological innovation and increasingly extensive cooperation, even if this cooperation is loose. The value can only continue to grow exponentially when adjacent networks collaborate to gain new sources of return. Some cooperation will be tangible, gradually expanding physical trade across space. But more connections will be informational and digital. Over time, we will see new matrices of cooperation between physical and digital networks, relying on and extending the social interconnection they create. It is this intersecting, partially nested, growing network of collaborative structures that spans the digital and physical worlds that DeSoc enables.

By forming networks and coordinating, DaSoc emerges at the intersection of politics and markets, enhancing both with sociality. DeSoc gave JCR Licklider (founder of ARPANET, which created the Internet) a vision of “human-machine symbiosis” in the “interplanetary computer network” and significantly increased social vitality on the basis of trust. Rather than building on the trustless premise of DeFi, DeSoc encodes the networks of trust that underpin today’s real economy and enables us to leverage them to generate multiple network goods that are resistant to capture, extraction, or domination. Through this enhanced sociability, web3 can eschew short-term over-financialization in favor of unlimited future benefit increases across social distancing.

6.1 Souls/soul clusters can go to heaven or hell

While we’ve selectively highlighted what we believe has potential to be hopefully unlocked by DeSoc, it’s more important to remember that almost any technology with this transformative potential will have a similar potential for disruptive change: flames burn, wheels Rollover, TV brainwashing, car pollution, credit card framing debt, etc. Here, SBT, which can be used to compensate for in-group dynamics and enable cooperation across differences, can also be used to automatically redline unwelcome social groups, and even target them with cyber or physical attacks, restrictive immigration policies, or predatory behavior. loan. Such possibilities are not prominent in the current web3 ecosystem, as they are not meaningful concepts on their current basis. The benefits of enabling DeSoc also enable these harms. Just as the disadvantage of having a heart is that it can be broken, the disadvantage of having a soul is that it can go to hell, so the disadvantage of having a society is that society is often driven by hatred, prejudice, violence, and fear. Humanity is a great and often tragic experiment.

As we ponder the possible utopias of DeSoc, we should also place these possibilities in the context of other tech-enabled dystopias. Web2 is an opaque architecture of authoritarian surveillance and social control that typically relies on top-down artificial bureaucracies to grant identities (“driver’s licenses”), whereas DeSoc relies on horizontal (“peer-to-peer”) social proof. DeSoc empowers Souls to encode their own relationships and co-create multiple properties, while web2 mediates or monetizes social relationships through opaque algorithms that can create polarization, division, and misinformation. DeSoc eschews a top-down, opaque social credit system. Web2 forms their foundation. DeSoc sees Souls/soul clusters as proxies, while web2 sees Souls/soul clusters as objects.

Using DeFi for social control (without any identity basis) is less risky, at least in the short term. But DeFi has its own dystopia. While DeFi overcomes explicit forms of centralization—that is, specific actors have a super-level of formal power in a system—it has no built-in way to overcome implicit centralization through collusion and market power. Monopolies didn’t always emerge as Standard Oil did in the past. Collusion can even occur at higher and farther levels of an ecosystem. We can see this today with the rise of a slew of institutional asset managers. Pioneer, BlackRock, State Street, Fidelity, etc. are the largest shareholders of all major banks, airlines, auto companies and other major industries. Since these asset managers hold stakes in all competitors in an industry (for example, in every major airline), their motivation is to make the companies they own look like a competitive industry, but its Acts like a monopoly, maximizing profits and securing the entire industry at the expense of consumers and the public. [16]

The same is true in DeFi, where the same “whales” and VCs accumulate larger stakes at each level of the stack and among competitors within the stack, perhaps voting in token governance, or delegating it to the same Class representatives, they also have similar correlations across the network. Without any social foundation against witches and the associated discounts of forcing functional decentralization, we would see more whale-funded monopolies as monopolies increasingly become the largest pool of available investment capital. As the “money class” and users diverge, we should see (and have seen) increasing incentive misalignment and rent extraction. If DeFi apps emerge that deal with private data, we’re likely to see similar dynamics, such as apps encouraging bidding wars between multiple people who “own” data that are actually relationships, such as their social graphs, to build A single private AI, competing with humans, avoids competing multiple AIs in the future, thereby augmenting human capabilities.

So DeSoc doesn’t need to be perfect to pass the test of acceptable non-utopia. To be a paradigm worth exploring, it just needs to be better than existing alternatives. While DeSoc has the potential to guard against dystopian scenarios, web2 and existing DeFi are falling into an inevitable dystopian mode, concentrating power in the hands of elites who determine social outcomes or hold most of the wealth. The direction of web2 is deterministic authoritarianism, accelerating top-down surveillance and behavioral manipulation capabilities. The direction of DeFi today is nominally anarcho-capitalist, but has fallen into network effects and monopoly pressures that threaten to turn its mid-term path into authoritarianism in the same way.

In contrast, DeSoc is a random social pluralism, a network of individuals and communities, as emerging attributes of each other, that together determine their own futures. From a web2 perspective, the development of DeSoc can be likened to the rise of participatory government that has prevailed in centuries of monarchy. Participatory government did not necessarily lead to democracy, it also led to the rise of communism and fascism. Similarly, likewise, SBTs do not make digital infrastructure inherently democratic, but are compatible with democracy based on what Souls/Souls and Communities/Communities collectively decide. Opening up the space for this possibility is a clear improvement compared to the authoritarianism of Web2 and the anarcho-capitalism of DeFi.

§7 Challenges in implementation

Privacy concerns are a key challenge for DeSoc. On the one hand, too many public SBTs may reveal too much about the soul, which makes them passive and “socially controlled”. On the other hand, too many purely private SBTs will also lead to the issue of correlation discount between private communication channels and the level of social governance and coordination, which reflects the importance of incentive compatibility issues. Also closely related to the issue of privacy is the issue of deception: souls may communicate through private or other auxiliary channels, thereby distorting their communal solidarity. It is impossible for us to know all the possibilities and answers along the way, so we need to deeply explore the nature of these difficulties and chart a promising path for the future.

7.1 Private Souls

The system of the blockchain is public by default, and any relationship recorded on the chain is immediately visible not only to the participants, but also to anyone in the world. Having multiple aliases preserves some privacy: a family soul, a health soul, a professional soul, and a political soul, each corresponding to different SBTs. But if these pseudonyms are superficial, outsiders can easily connect these souls, and the consequences of this behavior are serious. So, the “naive” act of simply putting all SBTs on-chain could result in a lot of personal information being exposed on a multitude of applications if steps are not taken to protect privacy.

To address the problem of over-disclosure, there are many solutions of varying degrees of technical sophistication and functionality. The easiest way is to store data off-chain through SBT, leaving only the hash value of the on-chain data.

On-chain data (fully public) Off-chain data On-chain hash (owner can choose when to show it)

How to store off-chain data is up to individuals to choose, and viable solutions include (i) their own devices, (ii) trusted cloud services, (iii) decentralized networks such as the InterPlanetary File System (IPFS). Storing data off-chain allows us to have the right to write SBT data in the smart contract, while having the separate right to read that data. Bob can choose to display the contents of any of his SBTs (or other data stored there) only if he wants to. This is a big improvement, and since most data only needs to be processed by a small number of people, it further increases the scalability of the technology.But to fully realize features such as protecting multiple privacy (annotation: refers to various types of privacy or (and) a collection of privacy), it is necessary to dig deeper and deeper into the relationship. Fortunately, many encryption techniques can help us at this point.

There is now a powerful set of building blocks that support a new way of partially displaying data information, which is called “Zero Knowledge Proofs”, a branch of cryptography. While zero-knowledge proofs are commonly used today for privacy protection of asset transfers, they also allow people to prove arbitrary statements without revealing any information other than the statement itself. For example, in a world where government documents and other proof information can be cryptographically proven, someone could prove a statement like “I’m a Canadian citizen, 18+, have a college degree in economics, have over 50,000 Twitter followers, and someone No account has been registered in this system yet.”

Zero-knowledge proofs can be computed on SBTs to prove characteristics about a soul (such as it has certain members).This technique can be further extended by introducing multi-party computation techniques (such as garbled circuit computation), which make the proof process two-way double private: the verifiers do not reveal who they are, and the verifiers do not reveal their verification mechanisms. In this process, both parties calculate together, and only the information is output.

Another technique is to designate validator proofs. In general, “data” is unreliable: if I send you a movie, I can’t technically prevent you from recording it and sending it to a third party. Methods like digital rights management (DRM) are limited and often costly to users. But the “evidence” is reliable in some way, if Amma wants to prove to Bob some property X of her SBTs, she can make a zero-knowledge proof of the following statement: “I hold SBTs that satisfy property X, or I Possesses the access key to Bob’s soul.” Bob is persuaded by this statement: Amma must actually hold SBTs satisfying property X because he knows he has not made a proof, but if bob passes the proof to Cuifen, Cuifen does not Will be persuaded: Because as far as he knows, bob can prove it through his own soul access key. At this point the proof can be further strengthened using verifiable delay functions (VDFs): Amma can show a proof that can only be made now with the required SBTs, but someone else will have to wait 5 minutes later. This means that access to trusted proofs of the data is possible, although there is no choice over the different types of raw data itself (possibly copied and pasted). Just as traceability in blockchain transactions can prevent someone from copying and pasting valuable NFTs (and the original sender of a sybil attack), SBTs can provide traceability in propagation, which can at least reduce uncertainty of provenance The value of the data (copy-paste).

These off-chain data and zero-knowledge technologies are compatible with negative reputation (embodied by SBTs), and they will still be shown even if the holder does not want them to be seen. Negative reputation includes credit history, outstanding loan data, negative reviews and complaints from business partners, as well as the degree of harmony with relevant social relationships as evidenced by SBTs. The combination of blockchain and related cryptography could lead to a potential solution: smart contracts could force souls to incorporate negative SBTs into a data structure such as a Merkle tree stored off-chain, any zero-knowledge proofs or All garbled circuit calculations need to introduce this information, otherwise, there will be a visible “gap” in the data provided and the verifier will be identified. The Unirep protocol is an example.

The point of these examples is not to illustrate how cryptography can be used to solve all the privacy and data permissions issues of SBTs. Rather, it outlines a few examples to demonstrate the power of these technologies. An important future research direction is to determine the boundaries between different types of data permissions, and the specific combination of technologies best suited to achieve the desired permission level. Another question is what type of compound property regime is required for data governance, and how to separate rights to use (“usus”), rights to construct (“abusus”), and rights to benefit (“fructus”).

7.2 Cheating Souls

If SBTs are the social basis for coordinating composite property, networked goods, and intellect, there is concern that souls may enter communities through subterfuge or deception to gain governance or property rights licensed by SBTs. For example, if many application directions rely on SBTs that can represent conference attendance, then there may be situations where these SBTs are used in exchange for bribes. If enough people are bribed, humans (and bots) generate a false social picture divided by (false) SBTs. Just as DAOs can be bribed, so can souls and the on-chain voting mechanism they use. Conversely, if SBTs are used to impair collaboration, the impact of SBTs can be mitigated. Why should we believe that the SBTs that souls have are actually living up to their social commitments, rather than simply telling them how to play the “game”?

One view is that there is a “balance” between the different motivations for deception. Souls self-assess and categorize the networks they find important, much like how Harberger taxes work by balancing the incentives to overvalue and undervalue assets to arrive at near-accurate market valuations. Souls will want to have more SBTs in order to gain influence in their communities, on the other hand they will avoid SBTs in communities they don’t care about and thus score lower on relevant metrics, which in turn enhances their wider presence. influence in network governance.

But it would be naive to think that the two motives of gaining power and gaining influence always cancel each other out (or nearly cancel each other out). There may be many communities using systems other than SBTs to restrict access and governance. Alternatively, the community may issue private SBTs (contrary to our assumption of publicity) to shore up governance power, while inducing community members to keep the existence of these private SBTs secret in broader decision-making.

“Game” is an important problem, and solving this problem is one of the future research priorities. In fact, this is one of the main reasons why it is very difficult to open-source existing algorithms that provide prioritization or sorting. To reduce and deter SBT “game”, we provide several norms and directions:

1. The ecology of SBTs can start from “dense” social channels, where SBTs validate off-chain community membership through strong social bonds and interactions with each other. This makes it easier for the community to identify, filter and revoke SBTs from impostors (or bots). We often find such “dense” channels in churches, workplaces, schools, gathering groups, and organizations in civil society, which will serve as “police games” in more “sparse” social channels (e.g. through bots, bribery, etc.) , impersonation) to provide a social basis that is more resistant to Sybil attacks.
2. Nested communities require SBTs to impose “context” on their “downward” potential collusion vectors. For example, if a state is holding a fundraising or voting round, the state may require every participating citizen to also hold SBT for designated counties and cities.
3. The openness and cryptographic provability of the SBT ecosystem can be used to actively detect collusive patterns and punish unreliable malicious behavior (perhaps lowering the voting weight of colluding souls, or forcing souls to accept SBT—in this case, negative reputation). For example, if one soul proves that another soul is a robot, the case can go deep and publicly verify the results, resulting in a large number of negative reputation proofs for that soul.Similar use cases have arisen in the GitCoin QF ecosystem, which uses a series of indicators or signals to detect “collusive groups”.
4. Zero-knowledge proof techniques such as MACI can cryptographically prevent certain proofs made by the soul from being provable. This discourages the sale of proofs because the bribe-giver cannot tell whether the bribe-taker has fulfilled the deal. There has been a lot of research on this technology, and eventually any non-financialized social mechanism could benefit from similar ideas.
5. We can encourage whistleblowing, which destabilizes large-scale “collaboration”. It is not the detection and punishment of incorrect or abusive behavior, the detection and punishment of abusive collusion patterns. Excessive use of this technique is risky because of the potential for false bribery, but it is still essentially a viable tool.
6. We can use peer-prediction mechanisms to encourage truthful reporting in all cases (unless collusion is severe).Attendees can prove each other’s presence, rather than the meeting, which also means that the number of participants that need to be bribed is very large and costly. Rewards don’t have to be financial, they can also be SBTs, and rewards are more positive for real community members than attackers.
7. If some souls have a common interest, we can use a correlation coefficient that measures the correlation. For example, use correlation techniques in quadratic financing to quantify the correlation between two participants to determine their degree of intersection. If two players have many common interests, their incentive to reveal this fact to the quadratic funding mechanism (there are many common interests) will certainly decrease with the correlation discount, but it will never become zero or negative .

§8 COMPARISONS AND LIMITATIONS

While the range of proposed identity frameworks is nearly limitless, there are four prominent and similar paradigms in web3 that are worth comparing: the dominant “legacy” authentication system, the pseudonym economy, proof of personality, and verifiable credentials. Each paradigm highlights the important contributions and challenges to future development of the social proof paradigms we advocate, and we use these limitations as a springboard for exploring future directions. In conclusion, we also explain why we believe that soul and soul-bound tokens representing social identity are a more promising direction for privacy regimes.

8.1 Legacy

Legacy authentication systems rely on documents or ID cards issued by third parties (governments, universities, employers, etc.), and the provenance is also determined through third parties. While there is something to be understood about legacy systems, these systems are very inefficient and lack composability for fast, efficient coordination. Furthermore, these systems lack a social relational context, making the soul dependent on a centralized third party to confirm membership in the community, rather than being embedded in the community. For example, most government-issued ID cards are ultimately traced back to birth certificates issued by doctors and family members, who are the ultimate source of truth, but this also ignores many of the equally meaningful social ties that bind together , which provides a strong verification. In fact, when centers of concentration of power need to seek strong identities (such as obtaining security clearances from the government), they rarely rely on these documents, turning instead to the “social relations” approach. As a result, such legacy identity systems tend to concentrate power on issuers and those who can perform “due diligence” to obtain stronger proofs, who in turn become rigid and unreliable bureaucracies. A key goal of DeSoc is to ensure that government ID security requirements can be met and exceeded, allowing horizontal networks to provide greater security to all users through a range of social bases.

8.2 Pseudonymous Economy

Balaji Srinivasan, who coined and popularized the term “pseudo-name economy,” broadly popularized a social vision based on combining reputation systems with zero-knowledge proof mechanisms to protect privacy. His early emphasis on using pseudonyms was to avoid social mobs from damaging and destroying a person’s reputation and social relations. It envisions people accumulating transferable zero-knowledge proofs in their own wallets and evading reputational attacks by splitting the proofs into new wallets or multiple wallets, which may not be traceable. When picking proofs to transfer, there is a trade-off between the degree of pseudonymity required for the new account, which requires a choice between being more anonymous (transferring less proofs) or being distributed across social networks (transferring more proofs).

The practical difference between the typical pseudonymous economy proposal and DeSoc is that we do not emphasize the division of identities as the primary way to be immune to a culture of “accusation”. Some degree of segmentation (e.g. different souls between family, work, politics, etc.) can be beneficial, but in general, relying on a new identity as the main way to defend against attack has a lot of drawbacks, it makes loans and provenance Reputation staking becomes difficult, and it is poorly composable with governance mechanisms that attempt to correct correlation or sybil attacks.

Instead of allowing the victim to re-emerge in the attack under a new (if diminished) identity, DeSoc allows other methods, such as socializing the attacker. “Allegations” often arise because when a person (or bot) has little social connection with the victim, statements and actions are disengaged, and slanderous messages spread through non-relational networks. In the same way that SBT provides attribution to prevent counterfeiting, SBT traces the attribution of “slanderous behavior” on social relations. “Defamatory conduct” is essentially the product of being outside the victim community (as reflected by shared SBT members), or the lack of SBT proof from the victim community (which casts doubt on the veracity of the conduct). SBT also enables victims to mount defensive responses to counteract strikes orchestrated and propagated from their web of trust (represented here by the model of co-holding SBT). By maintaining social relationships, people can maintain trust even when they face the threat of “accuses” and hold attackers accountable. Improving provenance can improve the social basis of truth.

8.3 Proof of Personality (PoP)

The Proof-of-Personality Protocol (PoP) aims to provide tokens of personal uniqueness to prevent Sybil attacks and allow non-financialized applications. To do this, they rely on methods such as global analysis of social graphs, biometrics, synchronized global key players, or some combination of these. However, since the PoP protocol seeks to represent individual identities (to achieve global uniqueness), rather than mapping relationships and solidarity social relations, the core of the PoP protocol is to treat everyone equally, and most of the application directions we are interested in (such as reputation staking) , are all about people and go beyond being a “different” person to be a “unique” person.

Furthermore, PoP protocols are not immune to Sybil attacks. PoP systems are susceptible to Sybil attacks in almost all near-term foreseeable applications, albeit at a slightly higher cost. Unless the majority of people on the planet have signed up for a PoP service and participated in a specific verification activity, attackers can always recruit people who haven’t participated (or are not interested) to act as “witches”. While not all bots are hired, there is little difference, except that there may be some added fees.

Many PoP protocols are designed to build the foundations of a universal basic income or global democracy, and while we do not have the same ambitions, these protocols prompt us to think about how to gradually build and coordinate multiple network products. Unlike the binary, individualistic and global nature of PoP, we aim to build a rich, layered and interconnected foundation for bottom-up reputation, property and governance, and allow participation in communities and networks of all sizes .

8.4 Verifiable credentials

Verifiable Credentials (VCs) are a W3C standard where credentials (or certifications) can be shared at the holder’s discretion with zero knowledge. VCs highlight the main limitations of our baseline privacy paradigm and motivate us to further explore the privacy aspects described above. VCs and SBTs can be seen as natural complementary elements until SBTs have the ability to narrow the scope of openness: in particular, SBTs are initially public, so they are not suitable for sensitive information such as government-issued identification, while the implementation of VCs has always been In grappling with a recovery paradigm, this may be addressed by community resilience. In the short term, the combination of the two methods works better than either method alone. But VCs have a key limitation: at least in general, VCs do not support most of the application directions we enumerate because of their unilateral privacy.

Unilateral zero-knowledge sharing is not compatible with our use case and does not meet our normative definition of privacy. Most of our application directions rely on some level of publicity, but with zero-knowledge sharing, there is no way for a soul to know that another soul has SBT unless it is shared with each other. This makes reputational pledges, credible promises, witch-resistant governance, and simple lease contracts (such as apartment rentals) impossible to obtain visible additional promises or proof of title. More deeply, we doubt that unilateral shareability is the correct privacy paradigm, as one party in a multiparty relationship rarely has the right to unilaterally disclose the relationship without the consent of the other, just as unilaterally negotiable private property is not. Like a perfect property system, simple unilateral shareability is not a perfect privacy system. If two parties jointly own an asset and choose to represent their relationship through VCs, this credential does not allow for mutual consent and mutual permission. This involves more complex compound properties and complex organizational forms and permissions issues, which are a feature of DeSoc.

§9 SOUL BIRTH

The path from the current web3 ecosystem to the enhanced sociality of SBTs faces a typical cold start challenge. On the one hand, SBTs are non-transferable, and on the other hand, the current form of wallets may not be the ultimate destination for SBTs because they lack community resilience mechanisms. But in order for community resilience wallets to work, they need to provide different SBTs in a decentralized community to be safe. SBTs First or Community Resilience First? Who are the early adoption communities? How do SBTs on different chains interoperate? Rather than aspire to know all the possibilities and answers, we outline possibilities for readers to explore further in the current web3 (or even web2) architecture.

9.1 Initial SBTs (Proto SBTs)

While SBTs are non-transferable, SBTs may have another property that will highlight their role in development: revocability.SBT can first become a revocable, transferable token before it grows to be non-transferable. Tokens are revocable if the issuer can burn them and reissue them to a new wallet. For example, when a key is lost or compromised and the issuer is interested in ensuring the token is not monetized and sold to a party. (In other words, burning and re-issuing tokens would make sense when tokens signify true community membership.) Employers, churches, meetup groups, off-chain interactive clubs with multiple contacts are all burning and re-issuing tokens. A great place for coins because they have a relationship with someone and can easily check for impostors via phone calls, video conferences, or simple face-to-face meetings. And a single interaction, such as the way to attend a concert or a conference, has a weaker community connection and is not suitable.

Revocable and transferable are the initial properties of the initial SBT before the soul is born. These tokens buy time for wallets to breed secure community resilience mechanisms and for individuals to accumulate initial SBT (which can eventually be burned and reissued as non-transferable SBT). In this approach, the question is no longer “SBTs first or community resilience first?” Instead, SBTs and community resilience mechanisms work together to give birth to a soul.

9.2 Community Recovery Wallets

While today’s wallets lack community resilience, they have their own pros and cons as SBT’s home or “breeding ground”.The beauty of Proof-of-Personality (PoP) protocols is that attempts are already being made to build social dispute resolution mechanisms that are the foundation of community resilience. Additionally, many DAOs use POPs to facilitate governance, making them the natural first issuers of SBTs. However, despite PoPs ahead, PoP protocols have yet to gain the widespread trust to store valuable token assets, which escrow wallets do.

Custody wallets (heavier centralization) have therefore become the dependencies of immature users. Such custodial wallets can build tools for the retail community to issue revocable tokens that can then be converted (or reissued) into SBTs, or even more “enterprise” issuers that lack the relevant expertise ( Many of them seek to build a base of loyal customers in web3). Once the community resilience mechanism is formalized and tested, these custodial wallets can be decentralized into community resilience, while the custodians continue to provide other valuable services (such as community management, SBTs issuance, etc.) in DeSoc.

For more in-depth web3 users, decentralized non-custodial wallets (or non-custodial community resilience wallets like Argent and Loopring) are a natural starting point to bootstrap the community recovery mechanism. The advantage of a non-custodial wallet is that it is native web3 open source, and the mechanism can be pre-announced and gradually experimented, allowing a subset of willing, mature users to participate in the experimentation of incentive mechanisms and hybrid mechanisms (such as multi-signature). All of these approaches: POP, custodial and non-custodial, play an important role in testing and onboarding users with different levels of maturity and risk tolerance.

9.3 Proto-Souls

Codes of conduct can also guide the existence of the soul. As we rethink tokens and wallets, we can also restructure certain classes of NFTs and tokens that highlight membership. In particular, we could introduce a norm not to transfer NFTs and POAPs issued by reputable institutions that respect conference attendance, work experience or educational credentials. The transfer of such membership tokens (if traded in value) may reduce the reputation of the wallet and may prevent the issuer from further issuing membership or POAP tokens to the wallet. In a non-custodial ecosystem, a large number of users gain considerable financial reputation and hold shares in their wallets, which can serve as indirect collateral against their expectation of non-transferability abuse.

While all of these pathways have their own challenges, we hope that, through a methodically diverse set of small steps, we increase our chances of converging to a quasi-equilibrium state in the medium term.

§10 Conclusion

While we have high hopes for what DeSoc can achieve, the above are just the first steps. There is more than one road to DeSoc, including many non-blockchain-based frameworks such as Spritely, ACDC, and Backchannel, which rely on data storage tied to a local machine rather than a distributed ledger. These frameworks may ultimately enable greater trust across social distancing, as they can leverage the transitivity of trust relationships (such as trusted introductions) rather than relying on SBTs issued by well-known, authoritative institutions (such as universities or DAOs). Furthermore, the applications we describe above are just the beginning of DeSoc’s reinforcement and do not involve virtual worlds: their “physics”, society, and their complex relationship to the real world. All of this suggests that the lofty ideals we’ve depicted above may just be the “rudiments” of DeSoc’s final form.

However, there are still many challenges and problems to be solved along this path. The above blueprint is still relatively abstract and theoretical, and needs to be constantly tried and improved. How do DAOs balance soul patterns and correlations in SBTs to prevent Sybil attacks and ensure decentralization while maintaining openness? How does Incentive Compatibility earn SBTs for Relevance Discount Schemes? How much conflict does privacy have with related discounts and other DeSoc mechanism designs? How do we measure inequality in a social (open), yet appropriately private, way? How should legacy systems work in community resilience mechanisms? Is it redlined, or even included in the protocol, to avoid a dystopian situation? Or should the best scenario be created? These issues are only part of a research and development process that may last for several years in the future, and they will evolve with the ecological development of DeSoc.

However, DeSoc’s potential is worth the price of these challenges, and it may be necessary to ensure our survival. Albert Einstein said at the Geneva conference in 1932 that “the organizational capacity of man” has not yet kept pace with “technical development”, which is the equivalent of having “a 3-year-old child with a razor.” His ideas are so prescient that learning how to program the future of society, rather than rhetoric based on “trust,” seems to be a required course for humans to survive on this planet.

11 References

1. We thank Audrey Tang, Phil Daian, Danielle Allen, Leon Erichsen, Matthew Prewitt, Divya Siddarth, Jaron Lanier and Robert Miller for their thoughtful feedback and comments. All errors and opinions are our own responsibility.
2. Microsoft Corporation & RadicalXChange Foundation, glen@radicalxchange.org. Glen vinicula este documento a su Alma.
3. Flashbots Ltd., puja@ashbots.net. Puja gave this text to his grandmother Satya, whose love and light will continue to shine on countless souls
4. Ethereum Foundation, vitalik.buterin@ethereum.org.
5. We chose this set of properties not because they are clearly the most desirable set of features, but because they are easy to implement in the current environment and support a lot of functionality. We will discuss programmable private SBTs in Section 5.3.
6. Note, however, that in principle de jure names can be represented as SBTs: a family name would be a member SBT of a family group, and a given name could be an SBT given to a child by parents. In fact, a richer name concept would be easily represented if other family members or related persons gifted a member SBT to a new child.
7. https://twitter.com/VitalikButerin/status/1264948490834247681https://twitter.com/VitalikButerin/status/1265252184813420544 Evidence from informal twitter surveys suggests that the idea of ​​taking into account diversity in decision-making mechanisms is already perceived as intuitive of.
8. Not enough data accumulated: https://www.technologyreview-com/2021/06/17/1026519/racial-bias-noisy-data-credit-scores-mortgage-loans-fairness-machine-learning/
9. Social Recovery: https://vitalik.ca/general/2021/01/11/recovery.html
10. Matthew Effect: https://en.wikipedia.org/wiki/Matthew_effect
11. Data Cooperative: https://www.noemamag.com/a-view-of-the-future-of-our-data/
12. Multinationalism: https://press.uchicago.edu/ucp/books/book/chicago/P/bo138501033.html
13. We say “innocent” because highly cooperative groups will naturally seek to advance their interests, likely to influence their collective interests.
14. Under the quadratic rule, a team member can buy a contract that pays $X under the condition that the event occurs, but at a cost of (X^2)/$2. For example, if an event occurs, an individual who sets X = 0.5 will receive $0.5, the amount paid by the voter, and in any case at least $0.125.
15. If a person evaluates probability p, their expected reward Λ is pX and their cost is X^2/2. Derivative with respect to X, the optimal condition is p=X, assuming risk neutrality, which is reasonable for small stakes (both reward Λ and cost can be reduced or increased arbitrarily, the same argument still holds).
16. See Eric Posner, Glenn Weir, Radical Markets: Eradicating Capitalism and Democracy for a Just Society, Princeton University Press, 2018.