It is a separate discussion why it is important to not allow trading rep/votes. One reason is that the dxDAO does not have any form of minority protection (like rage quire). A 51% owner can do anything they like, including draining all funds.
It should be noted that “controlled” reassigning of REP can be fine. E.g. someone making a proposal to the DAO to give up REP and get a payout.
Anyhow, in this post, I just assume IT IS THE GOAL TO NOT ALLOW UNCONTROLLED TRADING REP. So the question is how can that be enforced.
- The DAO needs to vote on this decision to clearly set the rule, you are not allowed to trade your REP.
As soon as that would be established the DAO could agree to do the following:
a) if someone can provide cryptographic evidence that a member is trying to sell REP the REP of this member gets slashed.
However - it will be possible for someone who wants to sell REP to set up a smart contract that only transfers the REP (e.g. ownership of a safe that holds REP) upon payment. Specifically, a buyer could commit to payment for REP before the seller needs to reveal its address. This means a seller does only need to reveal its address in the transaction that already does the transfer. When already paid for it the buyer has no longer any interest in revealing the seller’s intention to the DAO.
This is why a second scheme is needed: a fake sell.
The DAO could agree that an honest DAO member is ALLOWED to try to “fake sell” her reputation. It would look like this: The fake seller would sign a message they are intending to fake sell and add a new address to this message. If a buyer indeed pays for the reputation the fake seller can reveal the signed message to the DAO and request the DAO to slash the reputation that is now in control of the buyer. The fake seller would get assigned a new reputation to the “new address” mentioned in the signed message.
If there is an agreement that the DAO would do such a thing it should become very unattractive to try to buy and reputation since a buyer could never have certainty that the rep is not immediately slashed after buying it.
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fake sell and add a new address to this message
this new address refers to the buyer’s address, the seller’s, or a newly generated one?
I would think if the collective implements such “fake-sell-scheme” non of the rep-buyers would actually try to buy REP, because (if they did their research) they would know about the “fake-sell-scheme”. Maybe it will lead to wanna-be-buyers don`t even try to buy because they don´t know if it is a fake sell.
If that is the case, how come you think a simple escrow service wouldn`t be the go to place to trade REP?
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Since the “fake seller” will give up control over this REP holding account (by e.g. setting the owner of a Safe to key held by the buyer) - the seller will need to commit (sign a message) to a “new address” that they control and the DAO can assign the reputation to after the buyer has been slashed.
Well - I guess after some time the escrow service would need to release the money to the seller (let’s say 1 month) whenever that timeframe passed the seller can still reveal to the DAO and slash the reputation and get new reputation.
Seems like a reasonable idea to create awareness in the public that buying REP is somehow risky. However, that might bring up the general problem of anonymity and that this is just a not so optimal way around it (and I guess there will be ways found to buy REP).
But this brings up a general question I had in mind for quite a time now but in a different context. I would like to know if the personification by identity of the REP is possible and if it would be a good approach to solve this problem. I was thinking about this in terms of voting. Past has shown that the manipulation of voting behaviour through social media is more present than ever. I mean, people (with a mentionable amount of REP) here on the forum could discredit an idea in a proposal because they are anonym just because they don’t want that proposal to pass, although the proposal is in general a reasonable and good one and is likely to pass. So in this regard I am raising the question if the address of a REP holder should be linked to his/her account here in the forum.