From invitation systems, guarantees, proofs, and slashing mechanisms to credibility quantification, a detailed explanation of the core design of the Ethos reputation system.

Written by: KarenZ, Foresight News

The crypto world is often likened to the "Wild West," filled with chaos and disorder. Trust issues have always been a key barrier to the further popularization and maturation of the industry. To address this pain point, Ethos Network is dedicated to measuring credibility and reputation on the blockchain, creating a more trustworthy environment for the crypto ecosystem.

As Ethos states, in the real world, credibility is everywhere; resumes determine job opportunities, ratings filter doctors, and five-star drivers get priority orders. However, the credibility system in the crypto world is nearly non-existent, lacking a clear and easily referenced credibility system, leading to high trust costs, zero costs for wrongdoing, and frequent fraud.

Ethos aims to fill this gap. Ethos's solution is an on-chain credibility protocol—generating credibility scores through decentralized mechanisms, akin to a "credit report" for the crypto world, but entirely based on open protocols and on-chain records, promoting the crypto ecosystem towards a more orderly and mature direction.

Core Design of Ethos

The Ethos protocol ensures the reliability, decentralization, and Sybil attack resistance of its credibility system through a series of innovative mechanisms combined with Social Proof of Stake (Social PoS). Here are its main functions and mechanisms:

1. Invitation System and Witch Hunt Protection

To ensure the network's resistance to witch hunts (i.e., avoiding manipulation of the system through the creation of numerous fake identities), Ethos employs a strict invitation system. Users must be invited by existing Ethos account holders to create their own Ethos Profile. This effectively limits the proliferation of malicious accounts.

The invitation mechanism also introduces a "credibility binding" design: the inviter and invitee form a binding relationship for 90 days after the invitation, with the inviter receiving 20% of the invitee's credibility score, whether it increases or decreases. This means that if the invitee earns a high score due to honest behavior, the inviter can share 20% of that score; conversely, if the invitee loses points due to malicious behavior, the inviter will also suffer a corresponding loss. This mechanism incentivizes inviters to carefully choose whom to invite, enhancing the overall credibility of the network.

2. On-Chain Credibility Score

The core function of Ethos is to generate a Credibility Score, a quantifiable indicator of a user's trustworthiness on-chain. The score is based on the following on-chain activities and social interactions:

• Review Mechanism: Only individuals with an Ethos Profile can leave comments, which can be positive, neutral, or negative. While a single comment has a minor impact, the cumulative effect of numerous comments can significantly alter a user's credibility score. For example, consistent positive reviews from multiple high-credibility users can greatly enhance the target user's credibility.

• Vouching Mechanism: Ethos users can stake Ethereum (with plans to support other assets in the future) to vouch for other users, indicating their trust in their credibility. Vouching directly affects the target user's credibility score. Key features of the vouching mechanism include:

1. Vouchers must stake a certain amount of ETH. The higher the staked amount, the greater the positive impact on the target user's credibility score.
2. The staked ETH will be locked as a financial endorsement of the vouching user's credibility.
3. Vouchers can withdraw their vouching at any time; if they find the vouching user behaving improperly, withdrawal will lead to a decrease in the target user's credibility score.
4. When user A and user B vouch for each other, the system recognizes this as a mutual vouching relationship, significantly enhancing both parties' credibility scores.

• Slashing: Aims to curb bad behavior through a community-driven punishment mechanism. This mechanism is not yet live.

1. Any Ethos participant can act as a "whistleblower," needing to provide a certain amount of rewards to validators to request manual verification.
2. Validators receive the same reward regardless of the voting outcome, which helps mitigate bias.
3. If validators support the whistleblower's claims, a portion of the accused user's staked funds will be deducted to reward the whistleblower. A single slash does not exceed 10% of the total Ethos stake. If the whistleblower's claims are unfounded, they will face penalties.
4. The deducted funds are taken directly from the accused user's staked amount and transferred to the whistleblower. This punishment is the only mechanism that can forcibly deduct funds without the staker's consent, but it is designed to occur rarely (usually handled first through negative reviews or withdrawal of vouching).
5. The penalized accused user will not be punished again for the same type of report within 72 hours, providing a buffer period and preventing malicious continuous attacks.
6. Ethos users can also initiate "social slashing," which does not involve financial risk but affects participants' credibility scores.

• Attest Mechanism: Allows participants to link other digital identities, social network profiles, and on-chain wallets, reflecting authority, reputation, and influence from other channels. The attestation itself is free, with users only needing to pay the required gas fees. Certified accounts and wallets will be permanently recorded on-chain. If a user engages in fraudulent attestation (e.g., linking to a non-belonging social account), they will face severe penalties:

1. Financial penalties: Staked ETH (if any) may be confiscated.
2. Social penalties: A significant drop in credibility score, potentially triggering social slashing.

3. Ethos Profile Display

User profile information can provide the community and other dApps with a transparent, verifiable trust reference. Users can also remain anonymous or use pseudonyms, without exposing their real identities. The Ethos Profile includes a credibility center and credibility score, integrating data from attestations, vouching, reviews, and slashing mechanisms. The credibility center of the profile displays a summary of relevant credibility clues, sourced from Ethos protocol or associated wallet on-chain activities, highlighting the most influential Ethos elements, such as large vouching amounts, prominent reviews, and major financial asset holdings.

4. How is the Credibility Score Calculated?

By analyzing the social interaction data generated from the above mechanisms, Ethos will generate a numerical Credibility Score, displayed in the Ethos Profile.

Regarding the calculation of the credibility score, the scoring algorithm will consider various weighted indicators, covering different types of on-chain actions. For instance, vouching-related indicators include the number of vouches, mutual vouching situations, vouching amounts, duration of mutual vouching, and default situations; as well as the credibility scores of reviewers or vouchers, the average rating contributed by the user on Ethos, and the duration of the attested accounts. The weights of each indicator are not linear, and the indicators and weights will be adjusted based on credibility consensus to ensure scientific validity and adaptability.

In terms of scoring range and levels, the score ranges from 0 to 2800, divided into five levels. Scores from 0 to 799 represent untrustworthy; 800 to 1199 indicates questionable; 1200 to 1599 is neutral; 1600 to 1999 is good reputation; and 2000 to 2800 is excellent. All wallets and attestations start with a default score of 1200 (neutral).

In governance, considering the importance of the credibility score, Ethos Labs plans to transfer control of the scoring algorithm to participants to avoid the drawbacks of centralization.

Ethos Reputation Market

Ethos has also launched the reputation market "Ethos Market." Ethos Market allows users to speculate on the reputation of individuals, companies, DAOs, or even AI entities by buying and selling "trust tickets" and "distrust tickets." Each market is linked to an Ethos Profile (associated with an Ethereum wallet), reflecting the real-time credibility score of the target entity.

The initial state is 50% trust vs 50% distrust, with prices dynamically adjusted based on buying and selling. Buying "trust tickets" can raise the target user's trust score while lowering the price of distrust tickets, and vice versa. Since credibility cannot be definitively determined at any given moment, the market remains volatile, thus Ethos Market adopts a perpetual market design.

Regarding pricing and liquidity in the prediction market, Ethos Market is based on AMM smart contracts, using the standard logarithmic market scoring rule (LMSR) algorithm to price two opposing positions. This is the same pricing algorithm used by Polymarket.

Summary

Ethos aims to make credibility a default element of the crypto economy, binding human values with on-chain behavior through the "Social Proof of Stake" mechanism, incentivizing users to demonstrate honest behavior while punishing malicious actors, thus promoting the crypto world towards a healthier and more orderly direction. Additionally, the Ethos protocol can be integrated into wallet plugins, dApps, etc., becoming a universal credibility layer in the crypto world rather than a single application.

Ethos's innovative mechanisms and concepts bring new hope for solving the current trust issues in the industry. However, Ethos also faces multiple challenges: the invitation system limits user growth, the scoring algorithm needs to ensure fairness, and community governance is still immature.

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