In this introductory post I’ll attempt to describe what a Reputation-curated registry (RCR) built on DAOstack could look like, how it compares to the token-curated registry (TCR) and some advantages and disadvantages of choosing one over the other.
To keep this reasonably concise and short, I’m assuming you, the reader, have a fair understanding of what a DAO powered by DAOstack is and especially how Reputation works.
The idea of a token-curated registry (TCR)
To start, I’ll quote Mike Goldin’s article on Token-Curated Registries (highly recommended read, especially the first few paragraphs):
“A token-curated registry uses an intrinsic token to assign curation rights proportional to the relative token weight of entities holding the token. So long as there are parties which would desire to be curated into a given list, a market can exist in which the incentives of rational, self-interested token holders are aligned towards curating a list of high quality. Token-curated registries are decentrally-curated lists with intrinsic economic incentives for token holders to curate the list’s contents judiciously.”
So, the main characteristics of a TCR:
- It’s decentralized (d’oh)
- It uses an intrinsic token
- Curation rights are proportional to the relative token weight of the token holders
- Curators (=token holders) are economically incentivized to use good judgement, to be judicious.
The combination of these characteristics is what can make the TCR a very high quality list that candidates would want to be a part of. This demand increases that intrinsic token’s value, since more candidates would require more curators.
That’s the TCR in a nutshell.
Of course, the TCR inherits all the flaws of a system that relies on token voting, the most obvious one being that one can simply buy voting power on the market and manipulate the curation process.
However, it’s important to note that token based curation (and voting in general) can be very effective for some specific cases, such as deciding on objective facts. I’d urge you to read Adam Levi’s Reputation vs Tokens post to understand the differences between the two.
How the TCR translates to the RCR
Simply put, the RCR is a curated registry where curators are Reputation holders in a DAO. We’ll call this the “RCR DAO” to indicate the DAO community of Reputation holders responsible for curating a registry.
Let’s see how this compares to the TCR.
- It’s decentralized. Arguably it’s even “more decentralized” than a TCR, since a RCR DAO is more resistant to bribery attacks and vote buying.
- It uses Reputation (=voting power). Reputation is non-transferable and controlled by the DAO.
- Curation rights are proportional to Reputation. Higher Reputation means more influence over the outcome.
- Curators (=Reputation holders) can be economically and otherwise incentivized to use good judgement.
So far, as you can see, there’s a 1:1 correspondence between the TCR and the RCR, with a more complicated and obscure question left to be answered in regards to how exactly the curators are economically rewarded. This is both the danger and beauty of having a DAO curate a registry.
While the cryptoeconomic incentive is “embedded” into the TCR, that’s not necessarily the case for the RCR. In the RCR, it needs to be designed. If there’s no incentive for curators, the RCR will fail. The interesting thing, however, is that a RCR DAO can be more versatile in terms of how it gets funded and how it funds its own activities, because Reputation’s utility is not exclusive to curation. A RCR DAO can do everything any other DAO can do. Some examples of how a RCR DAO can sustain itself financially:
- Via a continuous funding model (token bonding curve)
- It can be funded with grants as a non profit
- It can conduct its own public token sale
- It can request application fees from candidates that want to be listed on the registry
- It can request any other type of service fee
- …and more
Why Reputation works better than Tokens for a curated registry
RCR DAOs evolve by virtue of Reputation flow. For older curators to stay relevant as newer curators join, they need to stay aligned and active over time. This ensures that the DAO not only learns from its experience but also expands toward an optimal direction. This is where “DAOrwinism” takes place; the DAO is predestined to evolve (i.e. curate better) or fail.
In contrast, a TCR can generally have new, inexperienced curators with more influence than older, experienced ones. The reason being that curation rights can be bought. This means that even if the TCR’s curators grow in numbers, it won’t necessarily result in better curation. Consequently, this means that curation not be as high-quality over time since the number of candidates increases while the capacity and ability of the curators stays the same or worsens.
In more cases than not, the RCR ages like wine. The TCR like milk.
Last, but certainly not least, it’s worth noting that the RCR DAO is naturally able to curate a hybrid of purely Reputation-based registry and a token-based one. Such hybrid models are considered by other DAOs powered by DAOstack right now.
I believe that the RCR is one of the most exciting and practical use cases that you can build using DAOstack. Even better, all of the things that I wrote about regarding the RCR are technically and technologically possible today with nothing more than the features that Alchemy already has.
If you’re interested, I will follow up with a post on the parameters and configuration of a RCR DAO powered by DAOstack, hopefully soon™️.