Reputation at stake: incentive alignment models in TCRs


I recently came across an interesting article on token-curated registries - TCRs. For those of you, who never heard the term before, it’s a decentralized curation platform with built-in token incentives for all the participants. The key idea of TCRs is to create a fairer and more efficient rating / scoring platforms than the existing alternatives (e.g. centralized platforms like Yelp and centrally curated ratings like “Top 100 influential people”, etc.)

I will leave it for a separate conversation which use-cases of TCRs are justified and which are simply taking advantage of the blockchain hype. What drew my attention is how author argues that economic incentives are not enough to keep TCRs safe and unbiased, and as an alternative he suggests incorporating reputation incentives as well:

What we have come to conclude is that it is highly difficult to fully mitigate these attacks (economics attacks) if all we have is economic incentives. We have to bake identity into the system, such that curators put not just money, but also reputation, at stake. More specifically, token holders must go through a KYC process in order to claim voting rights; otherwise their tokens only give them rights to cashflow. This way we have a double incentive structure where economic incentives should keep curators honest most of the time and reputational incentives should alleviate risks of occasional economic attacks.

Aside from that, incorporating identity at stake would eliminate the risk of voting just for the sake of getting the tokens, the situation when curator does not care much about the outcome.

I wanted to share this with the POA community. Its great to see that identity at stake is getting more use-cases in blockchain incentive alignment models!