Social Contracts for Web3 Coordination I Tushar Ojha

Right, [Music] we are ready for our second last talk of the day and for this one like to bring on Tashar to tell you all about onchain reputation. So please give him a big round of applause. Hi everyone, thanks for having me here. It's always a great um opportunity to be in a room full of people working for the future of web 3 and from my interactions of today with people all of you here and I'm I'm pretty sure that web 3 is in good hands and it's going really great. What I want to uh talk today I'm Tashar by the way uh I'm building true network.

It's an digital reputation layer for the internet. And I want to put this idea um I want to make a statement that reputation is better than capital for social contracts in web 3. And I want to uh just put this idea in front of all of you not as a pitch for a product but a pitch for primitive that pitch for a new primitive that I think could add a lot of value uh to the people using web 3 and internet in general. So yeah, let's unpack this today. But before going on to depth for reputation, the way I want to start this is asking you guys this question that have been bugging me for a long time.

So what do you think guys? What problem does web3 solve at a human scale? If this would have been AI conference, I think people would be yelling at AGI, we want to build the artificial general intelligence and there's huge consensus about it. But what is it in web 3? I'll give some pointers.

Let me know by a hand raise if you think u that makes sense with you. Um, is it fairness? Do we want fair systems? Um, does that make sense? Okay.

Uh, is it the money aspect of it, the currencies that we could transact with? Is that what we are here for? Okay. I see some people shifting their hands. Um, is it the ownership aspect that you could own some items truly in in the for the first time ever?

Is that aspect excites you about web 3? Okay. Lastly, is it about the privacy which all of this year we have been uh reading about protocols building in the privacy sector? Okay, some people are here for privacy. I I have been reading about uh some great people talking about um what they are here for web 3.

Shiram talks about credible commitments and Ethereum that he says that blockchain basically provides you a credible commitment as uh think of it as that there could be only 21 million bitcoins. That's a credible commitment that a technology stacks makes. This is for the first time ever we are able to do it. Then Gavin would talks about less trust more truth that we are in a system where you don't have to trust uh anyone else on the network. Trust in itself is not bad is the is the fact that you're forced to trust when you're transferring money where you have to trust the bank you're transferring to.

That's a problem. So Ganwood says that we are building systems where you don't trust but there's more truth and um it vital and balaji talks about credible neutrality as a guiding principle. These are all different ways to say the same thing that we are building a system that is indifferent to the people using it. It has a set of rules that which we act. But I tried to confide this into a my way of saying this or like a more common thing that is coordination without trust.

uh that we all are here whether um we are using uh any app application online we want to coordinate with each other without needing to trust. So think of it when we go on unis swap today we swap a token there um at at the same time you know that if two people are swapping the token at the same time you know that the price that they're getting is same so that's how the fairness property is added when uh you're using for cryptocurrency or like when you're using NFD you know if you hold the NFT you are definitely credibly invited to the community that it has so that sort of properties that coordination happens and this coordination is called coordination without trust alignment and this alignment is great in itself but the way we uh that's what blockchain is for but the way we are building this alignment is actually using capital so we use capital to coordinate with each other so blockchains remove the middleman but then we are doing removing the middleman by using capital at stake so so the system works like this you want alignment you put up some financial stake and then um to make sure people don't lose the opportunity cost on that stake you give them the reward and then from the reward by giving the system you created this alignment now this alignment that we got it's like a trademill we are on so you keep on uh increasing the financial stake to uh handle bigger attacks and to attract more financial stake you have to give more rewards and thus this alignment lacks behind in this whole process so this system is great it works but it is not scalable enough because there's only enough capital in the world and how much could you stake all the time. So what I want to propose today in this talk um for the first time probably is and by the way this itself like take take a look at our uh bills that we pay. So for securing Ethereum that's blockchain itself we are paying about $4 billion a year to these validators to secure it. For a context Google pays around $500 million for their whole security across all products.

We are paying $4 billion. Pola dot pays 85% of their annual inflation through staking rewards. Bots and tables already drain these um and like onchain governance today has using like low signal votes like people who holds more tokens get more votes bureaucracy. So I think for all of these problems there could be proof of individuality and reputation together could solve this and the way to do it we call social contracts. And here's my pitch for it.

Unlike money which can be hoarded, reputation is distributed and plural. No one group can fully capture it. So this is a first time like a merit based thing that could be earned not inherited and is portable across context. So capital could be siloed in a protocol. You have $100 you could stake in a protocol but you can't stake it in another one.

Whereas repetition is based on if you are a D5 user, you're using your past behavior to actually coordinate with the people and removing the middleman in this case. So repetition makes as I said blockchains more plural. Capitals makes them plutoaucratic. We are already trying to solve like this capital siloed thing uh with Shiram's idea on restaking. We use the capital again and again to stake but I say we could also try a new way that is repetition.

So as I said the repetition is scarse non-transferable compounding and costly to fake. You may handle um some sort of uh capital loss but you won't be able to handle a repetition loss which is permanent which is onchain and which is there on your identity. The way we to implement this is complicated but I think whenever I talk about this uh what people usually say is that it has a cold start problem. How do you start a reputation system? Uh they get confused with um starting it using thinking of repetition as a way to onboard.

But I say repetition is not a way to onboard. It is a retention tool. Even if one or two apps decides to use the protocol that we are building today, uh they could start making the user stay and the system would start from there. The you the governance systems could use reputations from that point itself. So reputation for coordination is also not a new concept.

It has been part of our history. We all are from most people are here are from India. So if you remember Akbar, the great emperor Akbar uh he he was was was one of the first person I know uh in history who actually used a quantifiable numeric number to use as reputation for his officials. So he used this repetition to decide roles among people. He used this repetition to grant what access each individual had.

And this system worked great for him. He almost ruled uh the northern India all parts of northern India which is a big area if you are from here. Another thing Ashoka in past even before Akbar used a quality measure for this with the Ashoka's dhama concept he used dhama matras and then the spies network whose purpose was to trans to send out these values of repetition to the people that uh what is incentivized what is not that's what repetition is coming from that you decide okay this is incentivized you do this action on chain this is incentivized by giving you more reputation and if you do the other way it is not incentivized you may end up burning your reputation But the problem with the in the history and why this could be done now today is that why they failed sort of is that they were monarchyled governance and anyway like when these systems are monarchyled um you are never sure on the next game to be changing the value systems uh permanently. So what reputation systems with blockchains now could do that we can make them immutable. The rules that we set are now part of the protocol that can't be changed and it is verifi verifiable.

Now other thing is credible neutrality that you don't want people to be uh divided based on um who they are where they're coming from and everything. Blockchains treat them as anonymous wallets. So reputation again helps in this case to coordinate. When I say coordinate um also this is the first time we have a technology like a public ledger that people can trace back how they built their reputation and using it. So the trust again builds more on it.

How we do it is uh with true network we are uh basically allowing people to allowing protocols to give attestations to their users build their reputation in the system um and then use it across apps like an asset. So we are making reputation as an asset to be used with this this looks something like this where we have lot of onchain um attestations. These attestations are you transacting on a unis swap exchange um in a liquidity pool you're giving liquidity to systems um you're playing a game everything that you do different kinds of actions those act as onchain attestations then there is reputation models which are uh built by people and are running on chain that allows open uh open forkability and like open reliance on these things you can again uh build a better version if you like and this score generated is owned by the user user can own this reputation score and use it in apps. Now this sort of thing we have already seen there are a lot of projects are actually working in a similar fashion. What we want to start and tell all the projects together that let's build on one important narrative on it.

If so I just to tell that I'll just um take a step back and look at the general architecture back again. So we have identity think of identity we use to prove someone's identity we use proof of individuality mechanism telling that you are a unique individual whatever number of wallets you want to use use but at the end you are a unique individual there are many protocols ZK passport worldcoin and so many other polar has something called decentralized individual team mechanisms so we can use any of that is composable with that then on top of it you have your credentials the proof of contribution the actions that you did uh to build up your identity which is traceable. Then you have repetition models. This is all vertically integrated. So repetition models allows you to compute the scores on chain.

As I said, finally comes the most important part that is the social contracts which I'm here to I started the conversation with. Social contracts um essentially is a way to program these repetition. So far in web 3 whatever reputation systems we have seen they just act as a signaling force that okay you hold this score you this is your kiter score you either get money out of it or this is just a signaling system. We say that repetition could actually be a usable asset. Think of it like when you transact um on a contract you have message dov value which is the token.

Now you can have message repetition which is the repetition of the user. You can ask the user to sign this contract to stake their reputation in the app. If they don't do it right, you could slash their reputation and make them accountable for their actions. So that is how this works at true network. But this is an open extensible protocol.

Anyone else could also start building in this direction. So to give the more formal definition of social contracts, it is think of it as an agreement for coordination which is based on reputation as an asset. So we treat reputation not as a signal but as an asset. So the contract in itself there are some rules. The contract in itself is immutable and transparent like how we have in web three in general.

Then we have accountability of the contract. This is where we determine that something is transferable or not. So who the person who signed the contract the individuality of that person is linked to it and it can't be changed. You can't get out of uh the contract apart from any other rules mentioned in the protocol. So this basically defines for each party signing their end reputation.

The faithful execution of this whole process is kind of guaranteed by the underlying protocol that runs it. The reputation systems and the smart contracts like Ethereum uh gives the uh faithful execution guarantee for the smart contracts and your token flows. Similarly, true network in this case is going to give that and it allows users to like use just an asset like stake it, burn it, slash it, hold it for some time, decay someone's reputation. All these mechanisms are there and is purely permissionless. Any individual can choose.

However he built whichever app in which he built his reputation to be used as part of this. So this gives them more flexibility into what sort of things could be built. There could be games that um builds users reputation onchain and then use the repetition to create tournaments that like this is one of the things how um there most tournaments that happens on onchain games are actually offchain. So you could use the onchain repetition to define if you reached certain threshold you can be part of the tournament and join. Another example is that let's let's say you have not been liking what I've been saying so far decided to throw something at me which I would like to believe that Karthik would ban you from not going there because you are part of a social contract here as well which is the code of conduct.

So you are already signed a social contract but imagine doing the same thing in an online meeting where you have joined with your wallet. you would again like simply if you are banned you will spin up a new wallet and join it again. So repetition helps in this case with individuality together to make sure that you are uh following the rules of the protocols that you initially agreed on. There's so many financial use cases. The assets that I have mentioned uh the funds that we pay we could use we could pay validators with stable coins fixed stable coin rewards uh making them that not big organizations running up multiple validators earning up more and more capital and making the system centralized.

So these all work together to make our systems more efficient. I tried to draw this diagram. I'm not good at drawing but so think of it this this we have this repetition layer R1 R2 R3. These are the repetitions of each individual which is on chain which is present there. The individuality layer makes sure you are a unique individual.

And then the social contract this slightly visible yellow lines. These determine that how do you connect with peer-to-peer. So you can't always stake money when you connect with someone. I know there's protocols trying to do that but these are not scalable. You have only x amount of money and is not inclusive uh if we aim for this direction for staking money because what's the limit of staking money?

could keep staking more and more and more and then someday uh people can accept the loss to do some bit bigger hack. This is all not just an idea actually we started with ETH India 2022 with an idea of developer reputation. We tried to confine it worked hard to actually make it a protocol. ETH India 2024 is when we actually had some of these projects built on chain on the onchain the reputation narrative. We're trying to build this narrative from grounds up to have people actually building.

So some of these projects including like one of my favorites is the finalist for Ethereia 24 was fan base that basically if you like um Cold Play then you could basically get insured tickets if you have a certain reputation on the Spotify of listening them and actually enjoying their music rather than just holding and selling it for a better price. Placeholder is a very interesting project. Again, this allows people to actually uh create billboards with automatic reputation for each ads with people signing on to contracts that okay, this this this app doesn't look good or this ad doesn't look good. It's probably scammy and then you can turn down after the reputation goes down. So, social contract could again further these projects into better directions.

community a true network. We want this the whole purpose of this talk is to just invite a discussion on this uh invite people probably if you're building at ETH India next time or probably some hack to actually try on building this narrative that how you could use repetition into your apps. um we tried with India uh there's people building on it and there's a telegram group where we keep talking more and more of this in the last months we as an group of people very small team u we got a test net launched called Ramen network named after a scientist CV Ramen that basically has all these some of these features already implanted in some building uh we got a funding from web3 foundation we got a technical audit done first technical audit done a couple of months back from blog deep labs We partner 80 with India uh and we got Gavin Wood following us on Twitter with a very small Twitter base. Though our mission is simple that we want to build a coordination fabric for the internet which is not primarily based on capital but also based on reputation and I think uh we will soon be able to succeed on this and yeah guys that that's me Tushar from True Network. Uh I've been to ETH India for a very long time and yeah I want to end this by just this one quote that no force on earth can stop an idea whose time has come and I'm pretty confident the time for onchain reputation has come and please build on this narrative.

Thank you. [Applause] [Music]