Can Ethos Network Boost Trust and Credibility in Crypto?

Within the Wild West of crypto, the place scams and fraud stay frequent, one workforce is betting on a novel resolution: bringing status on-chain. Ethos Community, a platform designed to determine credibility and belief within the crypto area, is gaining traction because it tackles one of many trade’s most persistent issues—unhealthy actors.

The brainchild of Trevor Thompson (aka Serpin Taxt) and Ben Walther, Ethos was born out of frustration with rampant scams plaguing the area.

“I used to do a variety of buying and selling in crypto, and I witnessed a variety of the crime, fraud, and scams which have develop into extra obvious in current cycles,” Thompson advised Decrypt. “I felt impressed by the chance to resolve a few of that.”

The concept crystallized after Thompson’s expertise with Pal.tech, the since deserted social platform the place customers purchase and promote “keys” tied to Twitter accounts. Whereas Pal.tech launched the idea of tying on-chain actions to social id, it fell wanting addressing belief and credibility.

An instance of an Ethos profile and rating. Picture: Ethos

“Pal.tech was by no means making an attempt to resolve status, but it surely felt prefer it was the primary perception,” Thompson stated. “What if we may tie somebody’s on-chain actions to who they’re as an individual, and doc that on-chain?”

Walther, Thompson’s co-founder and Ethos Labs CTO, has been combating fraud, scams, and cyberattacks since 2006 in his position as a safety knowledgeable. Thompson approached Walther together with his concept for Ethos, sparking a collaboration between the 2. Their friendship initially shaped when Walther bought Thompson’s Pal.tech key and flipped it shortly thereafter for a 2x acquire.

Since then, they raised a $1.75 million funding spherical led by 60 Web3 neighborhood angel buyers together with 0xQuit, Dingaling, Sighduck, Dragos, 0xMakesy, and Zeneca.

From idea to actuality

Ethos, which launched in January, goals to create a “proof of credibility” system, straight documenting belief via a vouching system. Customers can vouch for others by staking cash in opposition to their status. The stakes may be withdrawn at any time

The Ethos web site places it merely: “Contribute and earn by constructing your status, backing others or penalizing unhealthy actors. Use the Ethos credibility rating to raised perceive who you’ll be able to belief and who to keep away from.”

The type of suggestions seen on Ethos profiles. Picture: Ethos

Ethos contributors are assigned “credibility scores” primarily based on how reliable they’re, akin to credit score scores however centered on social standing. The rating is set by the platform’s most engaged and respected members.

“Pal.tech’s bonding curve muddied the info about who trusts whom,” Thompson defined. “We wished to create a system the place belief is straight documented and economically safe, with out the pointless monetary draw back.”

The platform has drawn comparisons because the Fee My Professors or Yelp for crypto. Thompson typically agrees, however sees it as one thing extra.

“Take into consideration how you purchase merchandise or select docs immediately—critiques and status matter. In crypto, we’re all impartial companies working with one another, and belief is crucial. Having the ability to vouch actually provides weight to it.”

One early criticism of Ethos is the potential for a “circle jerk” impact, the place customers vouch for one another to inflate their credibility scores. Thompson acknowledges this threat, however argues that it’s a part of the method.

“You need individuals to vouch for one another—that’s the purpose. The aim is to boost the bar for status and separate credible individuals from bots and scammers.”

He addressed criticism for the “(3,3)” mannequin, often known as “vouch for vouch,” in an X publish, writing that adverse critiques and slashing mechanisms exist to punish unhealthy actors who attempt to manipulate the system.

The slashing mechanism is impressed by proof-of-stake blockchain networks, permitting customers to suggest slashing somebody’s credibility rating by staking their very own status. If the bulk agrees, then the goal loses credibility factors.

“It’s a approach to maintain individuals accountable and make sure the system stays truthful,” Thompson stated.

Constructing for the longer term

Ethos remains to be in its early levels, with round 1,000 customers and a workforce of six builders. The platform is at the moment invite-only, a call the founders say is intentional.

“We need to develop it at a sustainable price,” stated Thompson. “If we simply open it for everybody, then everybody would possibly be part of after which we’d not retain any of these individuals—after which they simply will not take part sooner or later. It occurs quite a bit in Web3 with hype cycles.”

Wanting forward, the workforce is exploring options like critiques constructed with zero-knowledge or ZK tech, which might permit customers to depart nameless critiques whereas nonetheless proving their credibility. “This might assist individuals share trustworthy suggestions with out worry of backlash,” Thompson stated.

The platform’s long-term imaginative and prescient extends past crypto, too. “Think about a world the place status is transportable and verifiable throughout platforms—whether or not you’re hiring a contract copywriter, or making a peer-to-peer transaction,” Thompson stated. “That’s the longer term we’re constructing towards.”

As Ethos continues to develop, it faces the problem of balancing openness with integrity. However for the workforce, the mission is evident: to create a system the place status is clear, verifiable, and on-chain. That is achieved via “backing status via monetary safety, making status itself inherently beneficial and in a position to be instrumented, measured, and rewarded.”

“The truth is, individuals aren’t eager about the results of their actions but,” Thompson stated. “However over time, as extra knowledge is saved on-chain, the reality will prevail.”

Ethos customers are incomes XP in the direction of… one thing. Picture: Ethos

When requested the million-dollar query of whether or not or not Ethos is planning on launching a token, Thompson answered ambiguously, however assured that they’re working to reward customers not directly.

“I can inform you that our XP system is designed to tell us in the way forward for how we’d reward individuals past simply XP,” Thompson stated. “It helps us perceive the best incentive mechanisms. and be sure that individuals are following these incentive mechanisms, balancing these incentive mechanisms.”

Token or not, in an area the place belief is usually briefly provide, Ethos is betting that status—backed by blockchain—would be the final forex.

Edited by Andrew Hayward