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 popularity 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 quite a lot of buying and selling in crypto, and I witnessed quite a lot of the crime, fraud, and scams which have turn into extra obvious in current cycles,” Thompson instructed Decrypt. “I felt impressed by the chance to resolve a few of that.”

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

An instance of an Ethos profile and rating. Picture: Ethos

“Good friend.tech was by no means attempting to resolve popularity, nevertheless it felt prefer it was the primary perception,” Thompson stated. “What if we may 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 position as a safety skilled. Thompson approached Walther along with his concept for Ethos, sparking a collaboration between the 2. Their friendship initially shaped when Walther bought Thompson’s Good friend.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 neighborhood 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, immediately documenting belief by a vouching system. Customers can vouch for others by staking cash in opposition to their popularity. The stakes might be withdrawn at any time

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

The sort of suggestions seen on Ethos profiles. Picture: Ethos

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

“Good friend.tech’s bonding curve muddied the information about who trusts whom,” Thompson defined. “We needed to create a system the place belief is immediately 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 right this moment—critiques and popularity 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 danger, however argues that it’s a part of the method.

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

He addressed criticism for the “(3,3)” mannequin, often known as “vouch for vouch,” in an X publish, writing that unfavorable critiques 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 popularity. If the bulk agrees, then the goal loses credibility factors.

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

Constructing for the long run

Ethos remains to be in its early phases, with round 1,000 customers and a group of six builders. The platform is at the moment 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 may be part of after which we’d not retain any of these folks—after which they only will not take part sooner or later. It occurs quite a bit in Web3 with hype cycles.”

Trying forward, the group is exploring options like critiques constructed with zero-knowledge or ZK tech, which might enable customers to go away nameless critiques whereas nonetheless proving their credibility. “This might assist folks share trustworthy 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 popularity is moveable 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 popularity is clear, verifiable, and on-chain. That is achieved by “backing popularity by monetary safety, making popularity itself inherently priceless and in a position to be instrumented, measured, and rewarded.”

“The fact is, folks 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.”

Ethos customers are incomes XP in direction of… one thing. Picture: Ethos

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 in a roundabout way.

“I can let you know that our XP system is designed to tell us in the way forward for how we’d reward folks past simply XP,” Thompson stated. “It helps us perceive the appropriate incentive mechanisms. and be certain 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 popularity—backed by blockchain—would be the final foreign money.

Edited by Andrew Hayward