I haven’t seen much detail on reputation systems in DAOstack talk or around other DAO projects. I think it’s a somewhat dangerous concept, so I’d love to get folks’ thoughts and find some solid links to more detailed plans around it.
From what I understand, most DAO builders, including DAOstack, are planning to support reputation currencies that are earned by individuals according to the value of their work, giving them more decision-making power. The purpose is to increase the influence of good actors and reduce that of bad ones, which sounds great and makes sense, but I see a couple frightening problems with it.
First, in most cases we don’t have a widely accepted definition of what makes work valuable. The only case where we do have a good definition is profitability. If your goal is to make as much money as possible, then value equals profit. But how much reputation was my contribution to that profitable project worth compared to others’ contributions? How much reputation do I get for fixing a purely internal problem that didn’t directly make any money at all? If my DAO is a non-profit charity, how will it assign reputation? If reputation is assigned via peer feedback, does that invite corrupt internal politics? These seem like tough questions that could make a lot of angry people and waste a lot of time for an organization.
Second, reputation seems like an endless positive feedback loop: reputation-rich people will be incentivized to vote for decisions that will grant themselves even more reputation, and they’ll have the power to do it. This might be the most serious problem. Too much lopsidedness here could even endanger the decentralization of a DAO, as it would be in effect centralized around the few super rich reputation holders.
A simple solution to most of these questions could be limiting how much power reputation can provide. Is that something that’s in the plans?