Tokenized Culture
0x9839
June 16th, 2022

Token-gated discord, members-only weekly reports, proposal votings.. everything requires a token. Slowly web3 culture is converting into collectors; an NFT for the membership, a social token for contributing to the community, and a POAP because you attended the party.

We are driven by tokens, we communicate with each other based on the tokens we hold. I don’t follow you on social media anymore based on your vacation post, I follow you because you hold the same membership token and you contributed to the last season's proposal.

Tokens are platformless, they belong where the community belongs, not trapped in one platform’s algorithm. Not there yet, but we are going to jump from chain to chain and connect with different people in different ecosystems. Our reputation won’t be based only on Ethereum, our main identity can be held on Ethereum but our whole identity will be defined through our actions on any chain, and yes, also off-chain.

Tokens should reshape how we interact, build and manage communities, earn reputation, communicate, and more.. rather than speculate on them. We should use tokens for:

  • Ownership
  • Identity
  • Reputation
  • Privacy

Let’s get into it!

Web3 social

We swift from like, follow and subscribe to buy my token and be part of my community. Creators are focusing more on owning the content they create, having a niche audience, cultivating communities, and building network effects.

We’re starting to experiment with a new culture, one where we don’t need to create content on current social media platforms anymore. We can now own our profile, data, content, and the way we monetize it. Hi Lens.

We will build, operate, and own the platforms we use. We aren't just static profiles on every social media platform, we're becoming tokenized communities with portable profiles.

Sign-In with your profile
Sign-In with your profile

Token gating wasn’t meant for hidden content on an NFT drop, token gating was built to enable content creators and brands to engage with their community, have an exclusive experience, and be part of the product creation. Token gated features went from a few articles to nowadays being the portal entry to utility.

But we’re still operating in an industry dominated by speculation. Most used projects are just DeFi or derivatives NFT collections printing -brrr- money. The participation rates of DAOs are low, and most likely, users who vote on any of these proposals are the same ones across different DAOs. In an ecosystem where everything can be bought, is so easy to have a Sybil attack on these communities, wherein an individual or coordinated group of individuals accumulate governance tokens and manipulate proposals voting in their favor.

Communities are starting to focus on social capital over financial capital. We call those Social DAOs, where from a chat group, users become co-workers. We contribute, we collect, we create proposals and we onboard new users with one goal, one vision that drives us all. A clear common goal that unites people with similar social status or interests.

Ownership

Web3 represents a new dawn in social media. It offers the ability for us to control how our content is used, giving us tools to track how creative work is shared, used, and monetized across the Internet.

Ownership represents a massive social shift in turning power from platforms to users, much as DAOs represent a transfer of power from companies to workers. It’s a new open model for social networks centered on the user, not the platform.

Our actions will mark our on-chain reputation. And all that, it’s on our wallets. Users are aggregating identity in their wallets.

We will move between platforms as one identity that we own, the tokens we hold, and transactions we sign, are defining our path through the new open web.

But will tokens define our identity?

Right now, what I know about you, is how much money you have, what transactions you made, or what proposals you voted on. We need to describe our traits as contributors; achievements, memberships, interactions, friendships, etc.. with people from all ecosystems.

Blockchain beyond finance. Even today, if tokens represent some social status in a community, we still have problems, it’s linked to a price. It’s more about how wealthy you are than the tokens you received by adding value to that community.

Airdrops need to be designed more intelligently. Sorting out the people who actually care about the project and have participated in it in some way. That specific wallet did this, used the project in this use case, etc. Airdrops focused on people who are potential contributors or the ones that can become contributors based on their activity in other communities.

More than that, we have access to public information on the blockchain. We can know about what our users collect and what communities they are part of, so we can find out what their interests are. Before airdropping or creating a new NFT drop, we know about their acquisition power, their holdings, and their interests. If they hold FWB, then that may be the token to use on the next drop and not charge 0.3 ETH minting price.

NFTs are an authentic reflection of someone’s interest. But we’re more than our interest. We have hobbies, personalities, emotions, and achievements. Our identity must go beyond finance. We need to define our identity architecture.

Verifiable Credentials and Soulbound tokens

I would define VC (Verifiable Credentials) and SBT (Soulbound tokens) as web3 beyond finance. All these can be a driver’s license, passport, Social Security Number, a university degree, proof of what I’ve done, proof of what I’ve listened to, proof of what I studied, proof of what I visited, proof of my degen skills, or anything that identifies or belongs only to me.

I don’t want to focus so much on the difference between these two but on how we can use them to define our identity architecture, our interactions, our achievements, and our everyday activity.

Brands like Adidas should drop you discounts if you have a proven token as a loyal customer, or Drake should drop concert tickets if you have a proven token of being a top listener in 2022. Our everyday activity has a lot of value. We do thousands of tasks daily but no one counts them on. We need to build an open system where your actions matter, your transactions have value and your reputation is built upon that.

From wallets to Souls

Some weeks ago, Puja, Glen, and Vitalik proposed the first paper on Decentralized Society. They presented Souls as wallets that hold Soulbound tokens and are used to establish provenance - the origin of something - and reputation. Souls can be associated with individuals, organizations, or other entities. Importantly, Souls are not intended to have a 1:1 representation of humans. We can have multiple Souls.

For example, your university could have a Soul that issues diplomas as Soulbound tokens to its graduates, all of whom have Souls that hold their respective diploma SBT. A great combination with VCs here is to issue credentials that verify I passed the latest Math exam. With that degree, I can start working as an intern without having to wait one more year in order to have my diploma.

You can have different Souls the same as you can define different personas within VCs. Your Identification Soul can hold your driver's license and your Credential Soul will hold your university degree.

One potential use case is changing the medical record management.

Let's be honest, our medical system is a mess. There is no inter-hospital sharing of medical records. Whenever I go to a different hospital, the doctor always asks about my allergies, past surgeries, or treatments that I've had to undergo. There's no record.

Nonetheless, when switching doctors requires so much effort to verify your identity or medical history. We can have a Medical Soul that holds all of our medical records. We could travel everywhere without having to carry our medical history.

On-chain reputation

If we want to unlock the full potential of web3 social, we need to implement positive and also a negative reputation for some players. Your on-chain record will open or even close some doors and opportunities for you.

But credentials have to be non-transferable if they represent properties of a person. We need to prevent a whale or a hedge fund to collect everything. This belongs to you as a unique identity built and shaped by any activity you’ve done. A reputation token that you will gain based on your activity.

It's important to consider someone's reputation. If you want to take out a loan you need to prove that you’re already taken some loans before with your wallet. You need to prove you can pay it back and you have a record that you’re solvent.

We are starting to see projects working on this, like Unirep, a private and non-repudiable reputation protocol built on Ethereum using zero-knowledge proof technology. The protocol offers a system where users can anonymously give positive and negative reputations to others and they can voluntarily prove that they have at least a certain amount of reputation without revealing the exact amount.

For the first time in history, web3 enables any user, anywhere in the world, to interact with any decentralized application using a shared state machine - where all interaction records are permanently stored in a public database.

Noox is a platform for Web3 users to mint badges based on on-chain actions. These badges will be Soulbound NFTs that cannot be transferred. In this way, the NFTs that people own are unique identifiers and may be used as their on-chain identity to unlock new opportunities.

Noox badges
Noox badges

Another example that is moving in this direction is RabbitHole. On their platform users can learn how to use and contribute to decentralized apps meanwhile earning tokens based on their on-chain activity. They envision credentials as access passes on the web3 ecosystem. In order to be a member of a DAO or access a smart contract, you will need that specific credential.

Why do we need privacy?

Let’s make a simple example, I’m Bob. If Alice sends a token to my wallet, she’s saying something about me that is public to everyone, forever.

If she sends me ETH she’s making a financial statement but if she’s sending me an SBT saying Bob is a scammer, she’s saying something more directive and specific about me.

This Soulbound token can have some data about me, meaning that people are able to read it and access it easily, always. But if the token has encrypted data, only the ones that are able to decrypt it could read it.

In this scenario, we need to secure permission, the sender, Alice, needs my consent before sending the SBT.

Secure permission on the wallet
Secure permission on the wallet

We need to design this well because Soulbound tokens can say a lot about ourselves. I can receive a token from a basketball club, then everyone will likely identify that I have an interest in this sport. Receiving a token can leak some information that intentionally affects your experience within projects or chance to get a new job.

With zero-knowledge proof, you can encrypt not only the content but also the sender and the recipient.

  • What goes on-chain is just a record which is encrypted to the destination public key. If you want to prove that you have some particular bit of reputation then you can do a zero-knowledge proof that says here is the decryption of one thing.
  • If you want to have proof that says I have never received something of this type then you can make a ZK snark that walks over the entire sets of records. If you decrypt all those records none of this would be a record of that type.

From the DeSoc paper, the simplest approach is that an SBT could store data o-chain, leaving only the hash of the data on-chain.

DeSoc: Private Souls
DeSoc: Private Souls

This is really important, but we cannot encrypt all our records. None of this would make sense then. We need to make some data public. The question is.. when privacy?

Our identity will hold a great amount of private data. It’s not Facebook’s game anymore, you decide what data to make public and who can read it. We shouldn’t broadcast specific private data by putting it on-chain.

Disco enables users to enjoy nuanced web3 reputation associated to public identifiers across chains and web2, while maintaining privacy and user autonomy.

Going back to our medical record management example, if you need to show that you have a specific allergy you could just present that specific credential without leaking data about your whole medical history. The benefits are:

  • Tells the verifier only what it requires.
  • Makes your credentials portable as you can combine them in any way you want for sharing with different verifiers.
  • You can build different “souls” or “persona” for specific categories: professional, social, health, sports..

We can enjoy it if we take hold of off-chain data for this purpose. Maintain our privacy and security without having data leakage when someone sends you a token. Instead of reading all your VCs or Soulbound tokens, you can encrypt access and make available only the necessary data.

Summary

Tokens should reshape how we interact, build and manage communities, earn reputation, access projects, access DAO tasks, and more when it comes to moving beyond finance.

Such tokens could enable better governance, for instance. A positive reputation can change the way we access content, become part of communities, get a job, participate in drops, etc. From token gating to Identity as a utility in the crypto ecosystem.

Social tokens, contributions, the NFT we collect, the NFT that represents us, POAP we issue, credentials we receive, profiles we mint, posts, songs, any content, what we like, what we curate..everything in the shape of a token will define who we really are.

Communities will be able to take their value and reputation anywhere they want. It won't be a profile for every platform, but it will be your portable identity with your wallets, your tokens, and your reputation wherever you want to connect. Your contributions will be recognized by every DAO you join. Your skills as a gamer will be available on any platform, so you won't have to start from scratch every time you play. It's platformless, you control how your tokens are used.

Our ability to interact with one another is not solely financial, but rather unlocking privileges of our behavior captured in tokens. Enabling privacy, showing the data we want and how we want, interacting with different dApps and smart contracts, and building our reputation.

Get your Soulbound token by being among the top 100 fans, obtain your verifiable credential university degree, and interact with other users without having to go to Uniswap to get some ETH for the fees.

We would be able to onboard so many new communities into our ecosystem if we could start with wallets that do not require funds to operate.

Let’s go beyond finance, let’s go social.

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