The Identity Maze (/memo)
March 31st, 2022

Today’s internet participants are interacting with gated platforms and isolated identities. You can sign up to any platform with your Google, Apple or basic email and enjoy the product. 

But identities are not owned and that's a big deal. The application that a user is using is responsible for determining the identity of that user.

The data behind any software product (ie. Instagram, Twitter, your B2B outreach software, etc.) makes them valuable. With usage and time, the accumulated history of the product makes it even more valuable and stickier.

While this sounds convenient at first, there are a lot of fundamental issues with application-specific siloes. To name a few: it's not always clear what has been tampered with and whatnot, we don't own our own data, or everyone struggles to keep control over their online reputations.

What's next
What's next

“Don't tell me what you're going to do, show me what you've done.”

Turning identities on-chain opens a new world of possibilities. Instead of trusting profiles, we can verify actions. From verifiable credentials to a reputation network. The adoption of reputation infrastructure defines new user behaviours that were not possible until now. It is in the best interest of individuals who are looking to unlock rewards to have their on-chain reputation be as strong as possible.

One thing is clear: who you are and how you represent yourself depends on where you are in relation to the other individual and the context in which you are communicating. Reputation in each profile can be viewed as context-specific, updating and assessing an address based on the on-chain and off-chain behaviour. 

Identities rely on aggregated data points across multiple wallets. Using a single wallet for identity or limiting identity to on-chain transactions misrepresents an individual's Web3 identity. Unique data points like governance tokens, NFTs or on-chain behaviour are the starting point. The aggregation leads to reputation and reputation leads to trust.

One of the cool things about reputation is that it's composed of many inputs. Combined, they allow for personalization as well as inertia. Digital identities will combine vectors like social reputation (Lens Protocol), contribution reputation (DeWork), identity providers (BrightID) and credentials (Buildspace). To name a few.

Reputation is also modular. The core changes are that the individuals have control over the discovery, sharing, and permissions of their data. Ultimately, linking several accounts and data sources together to get a more heuristic score.

For the most part, DAOs, a group of people with a common interest and/or mission, are just capital. But the DAO membership will become more sophisticated. Keeping the quality bar high it’s a priority and DAOs need multiple reputations as much as capital to operate efficiently.

We know our digital identities are more relevant to people we know less well. For people, we know extremely well, no amount of digital identity impact the way we view them. We think credentialing will be an industry in itself and will help bridge our experiences in real life and the metaverse.

Reputational Networks will likely have similarities to today’s search industry - the googles, the bings, duckducks. Each reputation algorithm will provide you with somehow similar results but different outcomes. And this is crucial. First, because it keeps the industry decentralized and second because it shows the importance of diverse scoring and interpretation. Each DAO, protocol needs to curate the scoring to its own advantage. 

We’re extremely excited to work on Aura Protocol. Aura extends reputation infrastructure to web3 and does it in an open way that anyone can build on top of it. The breadth of activity in the DAO ecosystem is outstanding. DAOs that support talent and community are way more likely to become references and we’re excited by the possibilities of new aggregation and scoring approaches. 

Disclaimer: We publish these memos to basically articulate a big idea we believe the world ought to see. When you read it you’ll notice there is no technical diligence nor particular alpha whether when or how will happen if ever.

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