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

The crypto world is often likened to the “Wild West,” full of chaos and disorder. Trust issues have always been a key barrier to further popularization and maturity of the industry. To address this pain point, Ethos Network is committed to measuring credibility and reputation on the blockchain, creating a more trustworthy crypto ecosystem.

As Ethos states, in the real world, credibility is everywhere. Resumes determine job opportunities, ratings filter doctors, and five-star drivers get first choice of rides. However, reputation systems in the crypto world are virtually nonexistent, lacking an easy-to-reference and clear reputation system, leading to high trust costs, zero-cost malicious behavior, and frequent fraud.

Ethos will fill this gap. Ethos’ solution is an on-chain reputation protocol that generates a credibility score, which functions as a “credit report” for the crypto world, but is entirely based on open protocols and on-chain records. This drives the crypto ecosystem towards a more organized and mature direction.

Core Design of Ethos

The Ethos protocol adopts a series of innovative mechanisms, combining social proof of stake (Social PoS), ensuring the reliability, decentralization, and Sybil attack resistance of its reputation system. Below are its main functions and mechanisms:

1. Invitation System and Protection Against Malicious Attacks

To ensure that the network is resistant to Sybil attacks (i.e., the ability to manipulate the system by creating a large number of fake identities), Ethos adopts a strict invitation-only system. Users must be invited by an existing Ethos account holder to create their own Ethos Profile. This effectively limits the proliferation of malicious accounts.

The invitation mechanism also introduces a “reputation binding” design: the inviter and the invitee form a binding relationship within 90 days of the invitation, and the inviter will receive 20% of the invitee’s reputation score, whether it is a positive increase or a negative decrease. This means that if the invitee gets high points for honest behavior, the inviter can share 20% of his score; conversely, if the invitee loses points for malicious behavior, the inviter will also lose accordingly. This mechanism encourages inviters to carefully select invitees and enhances the overall credibility of the network.

2. On-chain credibility score

The core function of Ethos is to generate a Credibility Score, a numerical indicator that quantifies the trust of users on the chain. Ratings are based on the following on-chain activities and social interactions:

Comment mechanism (Review): Only people with an Ethos Profile can post comments and can leave simple positive, neutral or negative comments for others. While a single review has a small impact, the cumulative effect of a large number of reviews can significantly change a user’s reputation score. For example, consistent positive reviews from multiple high-reputation users will significantly increase the target user’s credibility.

Vouching:Allow Ethos users to endorse other users by staking Ethereum (other assets will be supported in the future) to demonstrate trust in their credibility. Guarantee behavior directly affects the target user’s reputation score. Key features of the guarantee mechanism include:

The guarantor needs to pledge a certain amount of ETH. The higher the pledge amount, the greater the positive impact on the target user’s reputation score.

The pledged ETH will be locked as a financial endorsement by the guarantor of the creditworthiness of the guaranteed person.

The guarantor can withdraw the guarantee at any time. If the guaranteed person is found to have behaved inappropriately, the withdrawal will cause the target user’s reputation score to decrease.

When User A and User B vouch for each other, the system identifies a mutual guarantee relationship, and the improvement effect on the credit scores of both parties is more significant.

Slashing: Designed to curb bad behavior through community-driven punishment mechanisms. This mechanism is not yet online yet.

Any Ethos participant can act as a “whistleblower”. The whistleblower needs to provide a certain amount of reward to the verifier in order to request manual verification.

The validator will receive the same reward regardless of the voting result, which avoids the validator’s loss to a certain extent.

If the verifier supports the whistleblower’s accusations, a portion of the whistleblower’s pledged funds will be deducted to reward the whistleblower. A single Slash shall not exceed 10% of the total amount of Ethos pledged. And if the whistleblower’s accusations are not true, he will be punished.

The reduced funds are directly deducted from the whistleblower’s pledge amount and transferred to the whistleblower. This penalty is the only mechanism that can force the deduction of a staker’s funds without their consent, but it should be designed to rarely happen (usually handled first by negative reviews or cancellation of guarantees, etc.).

Those who have been punished will not be punished again for the same type of report within 72 hours, giving them a certain buffer time and preventing malicious continuous attacks.

Ethos users can also initiate “Social Slashings”, which does not involve financial risks, but affects the participants’ credibility scores.

Attest mechanism (proof): Allow participants to associate other digital identities, social network profiles, and on-chain wallets, thereby reflecting authority, reputation, and influence from other channels. The proof itself is free and users only need to pay the required gas fee. Authenticated accounts and wallets will be permanently recorded on the chain. If users make fraudulent certifications (such as linking to non-social accounts), they will face severe penalties:

• Financial Penalty: Staked ETH (if any) may be forfeited.
• Social Penalty: A significant drop in credibility scores, which may trigger social cutbacks.

3. Ethos Profile display

A user’s profile can provide a transparent, verifiable trust reference for the community and other dApps. Users can also remain anonymous or use pseudonymity without revealing their true identity. Ethos Profile includes Credibility Center and Credibility Score, and integrates data from testimonials, guarantees, reviews and reduction mechanisms. Among them, the Profile Credibility Center displays a summary of relevant credibility clues originating from on-chain activity of the Ethos protocol or associated wallets, highlighting the most influential Ethos elements, such as large guarantees, high-profile reviews, and major financial asset holdings.

4. How is the credibility score calculated?

By analyzing the social interaction data generated by the above mechanisms, Ethos will generate a numerical Credibility Score and display it in the Ethos Profile.

As for the credibility score calculation method, the scoring algorithm will comprehensively consider a variety of weighted indicators, which cover various types of on-chain actions. For example, guarantee-related indicators include the number of guarantees, mutual guarantees, guarantee amounts, mutual guarantee duration and default situations; there are also credibility scores of reviewers or guarantors, the average rating of users’ contributions on Ethos, the length of time to certify accounts, etc. The weight of each indicator is not linear, and the indicators and weights will be adjusted, increased or decreased based on the credibility consensus to ensure scientificity and adaptability.

In terms of scoring range and level, the scoring range is 0 - 2800, divided into 5 levels. A score of 0-799 represents untrustworthy; a score of 800-1199 represents doubt; a score of 1200-1599 represents neutral; a score of 1600-1999 represents a good reputation; a score of 2000-2800 represents excellent. The initial default score for all wallets and proofs is 1200 points (neutral).

In terms of governance, considering the importance of credibility scoring, Ethos Labs plans to hand over control of the scoring algorithm to participants to avoid the drawbacks of centralized influence.

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 Ethereum wallet), reflecting the real-time reputation score of the target entity.

Initially, the market starts with a 50% trust and 50% distrust, with prices dynamically adjusted based on buying and selling. Purchasing “trust tickets” increases the target user’s trust score and lowers the price of distrust tickets, and vice versa. Since reputation cannot be definitively determined at any given moment, the market will continue to fluctuate, and Ethos Market employs a permanent market design.

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

Summary

Ethos’ goal is to make reputation a default element of the crypto economy. Through the “social proof of stake” mechanism, it binds human values with on-chain behavior, incentivizing users to exhibit honest behavior and punishing malicious behavior, thereby promoting the crypto world’s development toward a healthier and more organized direction. Furthermore, the Ethos protocol can be integrated into wallet plugins, dApps, and other systems, becoming a universal reputation layer in the crypto world, rather than just a single application.

Ethos’ innovative mechanisms and ideas bring new hope for solving the current industry trust issues. However, it 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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