For this to be effective though, these credibility scores need to be at our fingertips, right where we engage in the space everyday.

Today, CryptoTwitter is “The Arena” for crypto

The clear leader of how people publicly engage in crypto is on CryptoTwitter. It is the primary “System of Engagement” for how we:

• learn about new opportunities, upcoming projects, and trending tokens

• measure market sentiment and how other people are feeling

• engage with other onchain participants, argue about who scammed who, and get caught up in bag bias

CryptoTwitter has one primary problem though: the signal to noise ratio is awful. Credibility is cheap and spoofed. Jump into the comments on an influencer’s tweet thread and you will instantly see hundreds of scam links, inauthentic project support, and shilling for various tokens.

At launch, the Ethos Chrome extension will surface credibility scores, helping you understand which signal that’s worth paying attention to, right where you need them: directly on Twitter.

The extension will:

• Add credibility scores and colors to all profiles, helping you interpret trust.

• Append direct links and useful Ethos related information such as number of reviews and vouchers to profile pop-overs.

• Replaces ENS names and Ethereum addresses with smart links and quick visual aids to quickly interpret the credibility of tokens and profiles in tweets.

By hydrating credibility information into Twitter, users of the Chrome extension will be able to better parse the signal from noise, lower their risk of scams, and be significantly more informed about the people they are dealing with.

Not just Twitter, though

Integration into Systems of Engagement is a critical strategy for Ethos to drive adoption and awareness, as Ethos starts primarily as a System of Record. While we’re initially launching with a Chrome extension that displays Ethos information on Twitter, we plan to expand Ethos scores to many other Systems of Engagement.

With time, Ethos will grow into its own System of Engagement.

Upvotes, downvotes and commenting are all a critical part of the initial infrastructure, but we start by being the system of record for CryptoTwitter - something that’s completely missing from the space today.

In the not-so-distant future, you will see Ethos scores everywhere – on Telegram, Discord, Farcaster, Blur, Etherscan, and any other System of Engagement where it’s valuable to surface someone’s credibility. It’s an important part of our user acquisition strategy and product flywheel, and will drive users to make Ethos, the System of Record, incredibly valuable.

Ethos will be everywhere, right where you need it. Right where you engage onchain.

These mechanisms represent peer-to-peer interactions that help document what people say about each other, hold them accountable for their actions, and create a trusted environment.

Each mechanism is critical to how Ethos functions: Review and Vouch borrow from simple real-world primitives like “leave a review for someone” or “I’m going to back someone with money,” while Slash borrows from web3 primitives that we have in Proof-of-Stake. The most important of them all, however, is likely the most underappreciated: Invite. Joining Ethos requires an invitation, and inviting someone can have consequences for the inviter if the invitee proves untrustworthy.

Let’s take a peek at these four mechanisms to explain how each helps shape the Ethos onchain credibility score:

Review

Reviews are the most simple form of peer signals we use in web2: Yelp, TrustPilot, Glassdoor, ZocDoc, WireCutter – even YouTube – are all filled with reviews we use to evaluate products, services and other people.

In Ethos, reviews are simple: mark the review as negative, neutral or positive and include a simple title and description. Any wallet or Twitter account can be reviewed, regardless of if they are also a user of Ethos. We see these reviews being used in a few different ways:

• You want to support a friend and show others that you back them? Leave them a positive review.

• You completed a transaction over-the-counter for Friend.Tech points and they followed through with their end of the deal? Leave them a positive review.

• Your favorite influencer or celebrity just pumped and then dumped a memecoin? Leave them a negative review.

These are simple signals that give us insight into interactions in the space: we can see who is interacting, the types of interactions that are happening, and how those interactions are going overall.

Reviews have minor effects on credibility score, but can compound over time. Reviews will be spam resistant in that a significant number of reviews from the same person in a short period of time will have diminishing returns on credibility.

Lastly, reviews in Ethos can become more valuable as we are able to weight them based on different things. For example:

• Similar to Chess ELO Scores, reviews that come from highly credible people for people with lower credibility scores have a bigger impact

• Users with low credibility scores have minimal impact to credibility score when reviewing people

• Every review has a built-in filter; upvoting and downvoting, which enables consensus to be driven about what reviews are helpful or not.

Vouch

Vouching in Ethos is the highest signal to others that someone can be trusted. Similar to staking Ethereum to a validator, the act of vouching in Ethos is putting your money against someone’s name, signaling to the rest of participants that this person can be trusted.

Unlike reviews, which are sybil-tolerant and subject to spam, vouching adds an additional layer of economic security to the protocol. A user with a significant amount of vouched Ethereum against their name is measurably more credible than someone with a couple of positive reviews.

Vouching for someone has a meaningful impact on their credibility score, but the credibility score must be earned over time from continuous vouching as opposed to granted immediately.

Credibility scores can also be multiplied through the idea of “cooperation” and mutually vouching, where two parties vouch for each other. This is what is often referred to as “The Prisoner’s Dilemma” - where ultimately cooperation is the best outcome for everyone.

Of course, there will always be a time when you need to get your money back after vouching for someone. Within Ethos, when you remove a vouch, you will be prompted to label it as either 'Healthy'—indicating you still support the person—or 'Unhealthy'—indicating that the person has done something to cause you to remove your vouch. For example, if you are removing a vouch from someone simply to reallocate funds you might mark it as “Healthy”, but  if the person you vouched for pulled the rug on their project and you need to signal you don’t support that person anymore, you would mark it as “Unhealthy.”

Finally, it is important to know the Ethereum you vouch into Ethos is subject to the next mechanism, called Slashing. Your Ethereum vouched is only at risk if you step out of line and get Slashed, so don’t worry - your eth is not at risk if you vouched for someone else who launches a scam token.

Vouching for someone will have additional incentives that we aren’t quite ready to share - more on that closer to launch!

Slash

While vouching represents a more significant version of a “positive review,” slashing represents a more significant version of a “negative review.” In traditional Proof-of-Stake implementations, slashing is used to prevent validators (that operate on staked Ethereum.. like vouching!) from stepping out of line and approving transactions that are invalid. Slashing acts as a financial downside in staking and encourages consensus.

We’re bringing this idea to Ethos, where users will be able to suggest that other users be slashed.

If a user who is attempting to be credible by participating in Ethos and vouching for other users gets slashed, their Ethereum and social reputation is suddenly at risk. This will encourage participants to protect their credibility and, consequently, their capital by remaining upstanding community members.

For a slash to be proposed, the slashing party must produce a bond, or a minimum amount of Ethereum that will then be awarded at the end of the slashing period. This will initiate a process to determine consensus about the slashing: Was the person who initiated the slashing correct in promoting the event? Did the individual being slashed step out of line, or was this a baseless attempt to slash someone without justification?

Other Ethos users will be able to participate in driving consensus by voting on the outcome while the slashing event is live. Depending on the result, the Ethereum that was at stake is then split up in different ways:

• If the slashing is agreed upon, the person who was slashed will lose a percentage of their staked Ethereum in Ethos, and it is distributed back to who initiated the slashing and who participated in the voting.

• If the slashing is denied, the bond that was put up to initiate the slashing would then be distributed to the person who was attempted to be slashed and whoever participated in the voting.

We are fine tuning these details as we work through our implementation, so expect change and adaptation as we learn!

Invite

The last mechanism, Invite, is one of the most important parts of Ethos. Contributing to Ethos requires that you are invited to participate. To start, invitations are limited and exclusive to ensure a high level of accountability and credibility within Ethos.

Inviting another user has an important component that’s similar to the other mechanics: you create a bond with the person you invite, and both users' credibility scores impact one another’s for a limited period of time.

This encourages users to invite high quality people and discourages users from inviting bad actors or their own sybiled accounts. If you invite someone whose credibility score deteriorates quickly, that could negatively impact your own score as well.

Invitations allow us to retain scarcity, control population early, learn under sybil-constrained circumstances, and keep the contributions to Ethos high. Invitations are so important that who invited you is prominently displayed on your profile card for everyone to see. It acts as a shield, a barrier of defense for all the other mechanisms.

Reviews, Vouches, Slashes and Invites are the primitives of Ethos. Together, they enable us to create a measurable, onchain credibility score to benefit all crypto participants and drive ethical and trustworthy actions across web3.

Why?

People want unbiased opinions about what other people say from:

• People who have actually used the product or service.

• People who are not profiting from affiliates or sponsorships.

• People who provide credibility through linking sources, research or, where applicable, sharing pictures to back up their review.

Reddit is a forum for discussion:

• Not only do you get an answer, but you can see the full conversation play out.

• One person liked these things about the product, another person countered those points, and someone else came in and recommended something completely different.

Upvoting and downvoting provides a “general consensus:”

• This creates a built-in noise/signal filter within the discussion.Astroturfing, soliciting, or shilling can be downvoted to the point where it doesn’t show up at all.

Keeping the points above in mind, let's continue with the example of Rabbit R1 Reviews.

A quick Google search links to three recent Reddit threads, within which you will find:

1. Insight into the Rabbit R1's usability and customer service from people who have actually used the product

2. Recommendations for improvements that need to be made before someone else should buy the product, and

3. Upvotes on well-researched or relatable responses, which helps you to recognize the Rabbit R1 reviews and posts that may be most informative

These Reddit threads provide genuine peer reviews to help a potential buyer make a well-informed decision.

Reviews from peers clarify signal and cut out noise

The most powerful signal we have when evaluating products, people, or services is what other people say about them.

Does Gen Z type in “Dodge Challenger Hellcat Consumer Reports” like their parents did before them? Or do they check out the Hellcat subreddit to read authentic reviews from real people who own the car?

No one is interested in a website that reads like a paid advertisement for a Hellcat or a Rabbit R1. There is far more trust in the opinion of a friend than the opinion of an editor for a publication. People are looking for honest reviews from people who have used the product. They want someone who can vouch for it.

These peer reviews are key to unlocking the truth of what people genuinely think about products, services, restaurants and even places to work.

They are so incredibly powerful, but they’re missing from Web3.

We need onchain reviews of people, tokens, dApps and services

With credibility in Web3 being so easy to spoof, and our inability to objectively gauge the value of someone’s voice when used, we have no way today to reliably instrument and trust peer signals.

Within Web3, we need more instrumentation:

• Did you have a smooth OTC crypto transaction with someone? Write a positive review.

• Were you happy with the work provided by a smart contract dev you hired? They weren't North Korean hackers? Write them a positive review.

• You noticed a celebrity shared a pump.fun coin then disappeared two days later? Leave a negative review.

This type of information is currently stuck as “tribal knowledge,” creating an information disparity between new entrants (who don’t know to avoid the Jason Derulo pump.fun coin) and the old guard (who have seen him do it before.)

In order to democratize this information, just like Wikipedia did for an entire universe of information, we must lean into documenting peer reviews.

Fortunately with Ethos, that is a simple onchain transaction. Anyone can write a review to the Ethos contract. Anyone can observe and consume that content. More people can now make a more informed decision in Web3

Over time these reviews will help us document more peer-to-peer insights on the people, projects and companies in web3 to trust or avoid.

Next time you ask yourself, “Should I trust what this person is saying?” or “Can I count on this person for an OTC deal?" you won't go in with blind trust.

You will search their username and Ethos score to get a genuine idea of their reputation and credibility.

or maybe you’ll google “0x5f capital ethos” ;)

We raised from angel investors who spend their time in web3 onchain every day, feel this problem, and seek change in how web3 operates. 59 investors with no lead or VC participation. Intentionally. Raised exclusively by the onchain community.

We’re a team founded by ex-web2 SaaS veterans - three founding members who previously built software together for millions of users in products you probably use every day.

With decades of combined experience from YC to Sequoia backed early startups, to building new products in incubator groups for multi-billion dollar companies.. we've been here before. we're product people, first. and 0 to 1 is our specialty.

Led by @0x5f_eth who is deep in the trenches of trading crypto daily for his hedge fund, we believe that the most important part of building a crypto start up is simple: Solve real problems. So we're tackling one of the hardest crypto problems of all: onchain fraud.

Onchain fraud accounted for over $9b of damages in '22. Whether it's rug pulls, unsolicited shilling, or insider trading, fraud prevents the space from growing Fraud is the reason crypto's public perception is poor Reputation & credibility are not valued or instrumented enough

With Ethos, crypto participants have a credibility score. A quick way to determine- can I trust this person? What's their history? Are they reputable? What do people say about them? A set of peer-to-peer mechanisms in reviewing, vouching and slashing will instrument this score.

The space will hold itself more accountable through Ethos. By creating a more trusted and safe environment onchain, we will open the funnel for the next wave of onchain users-- and actually retain them.

This fundraise enables the team behind Ethos to build the first iteration of the protocol, and it's coming soon on Base. Sign-up for the waitlist to get early access to our community when it launches shortly. https://waitlist.ethos.network

Thank you to all our supporters, investors and advisors - and everyone who gave us a chance during this fundraise to hear our vision and mission.

Now, we build.

Similar to a credit score, this credibility score is calculated from a variety of sources, including:

• onchain history and activity

• reviews written for you, and the credibility scores of the people who left those reviews

• vouches (Ethereum staked) to back you, and the credibility scores of the people who left those reviews

• slashes in you, if you happen to step out of line of community consensus

• who invited you to Ethos, and their credibility score

🟡 Please note: Anything said here is subject to change, as we expect to learn and make adjustments to the first iteration of the Ethos Credibility Score.

What’s the scale?

In the current pre-access phase of Ethos, we’re imagining a scale system that is similar to ELO ratings. ELO was created for chess and is primarily derived from competitive results; it is used to predict the likelihood of who wins when two people play each other.

While Ethos participants won’t be competitively dueling, when a user with a high credibility score reviews someone with a low credibility score, it should have a greater impact than two users with similar scores.

At present, Ethos scores are split into five levels:

0-800 - Untrusted800-1200 - Questionable1200-1600 - Neutral1600-2000 - Reputable2000+ - Exemplary

We expect to see a distribution resembling a bell curve, where:

• New wallets are likely to start in the Neutral range

• A smaller percentage of users land in Untrusted/Exemplary than Questionable/Neutral/Reputable

How do we determine an initial credibility score?

Credibility of web3 participants is incredibly challenging to measure today. Not only is it difficult to measure, but it’s cheap to spoof. How does Ethos give an accurate initial “credibility” score for users? While we are still working on this, we expect the vast majority of users to land in neutral credibility.

The strongest signals of how to build or lose credibility will be the mechanics that Ethos offers (reviewing, vouching and slashing), and these will be the most important drivers of credibility scores changing.

Here’s how we’re currently thinking about additional metrics that will influence the initial credibility score

Positive Influences:

• Your wallet has “significance”

  • history, participated in specific events, claimed specific rewards, etc.

• Your attested accounts (Discord, Twitter, GitHub, etc.) have “significance”

  • non-zero number of followers, git commit history,

• The person who invited you to Ethos has a high credibility score

Negative Influences:

• Your wallet and connected accounts have 0 significance

• The person who invited you to Ethos has a low credibility score

Each of these items is very purchasable; you can go buy a Twitter account with 10k followers and 10 years of history for a few dollars. This is why we intend to minimize their initial impact on your credibility score and start most people at zero, while maximizing the one clear signal we do have - who invited you?

Ethos' early access will start out as an exclusive, invite only product -  we intend for invites to be very limited for early access. Similar to someone vouching for you with capital, an invitation acts as a signal to the network that “this person can be trusted.” We believe that receiving an invite from someone who is already highly credible will serve as the best signal for your initial credibility score.

How does the credibility score change over time?

Participation in Ethos using our mechanisms is how your credibility score will change over time. These mechanisms are peer-to-peer signals to the network of who can be trusted and who can’t, with different orders of magnitude.

Reviews

The most simple form of Ethos mechanism, a review is negative, neutral or positive and has a minor impact to a user’s credibility score. Reviews can range from simple interactions, like an over-the-counter deal with someone, to more severe situations, such as when someone performs a rug-pull on their project.

Since reviews don’t have a strong connection to financial upside or downside, they reflect only minor change to a user’s credibility score - but can still be built up over time.

Vouches

This is the most clear way to signal to the market that you believe in someone- would you back them with capital? Vouches are only used positively, and can have a major positive impact to a user’s credibility score.

Let’s say you have a friend who has just joined the space and is looking to create a new web3 project. You know them personally, but the rest of the space doesn’t yet. As a reputable person on Ethos, you can vouch for your friend to help signal that they can be trusted. Vouches are a higher signal to the network because they require you to put capital against someone’s name, and thus your friend can be backed in a more meaningful way.

A user’s credibility score earned from vouches is likely to be earned over time, meaning not all credibility score is given up front. We’re still experimenting with and learning how vouches should impact credibility scores!

Slashes

Similar to vouches, slashes represent a more significant instrument than just an ordinary negative review. Slashing, commonly used in proof-of-stake systems, enables Ethos participants to initiate a vote on if another participant has stepped out of line. If consensus agrees with that vote, a slash will not only incur a financial penalty, but also have a major negative impact on the user’s credibility score.

Slashing is not yet implemented in our pre-release, as we are still working out how slashing will impact the credibility score. If you vote in a slashing event the same way as the outcome, should that count towards your credibility? Should being a successful slasher increase your credibility? We’re still learning and figuring this out!

Other Mechanisms

While these are the current primary mechanisms from which we expect credibility scores to derive, we have imagined other potential future mechanisms. We’ve been thinking about things like “promises” which would enable people to make a public promise, and Ethos users determine if that promise was fulfilled.

Transparency & Governance

The credibility score will be calculated off-chain to start, thought it will be 100% transparent and observable in how it’s calculated. Considering changes will need to take place as we learn and adjust the algorithm, it’s important to keep in mind that it will take revisions to reach a true baseline.

While the Ethos team will define the initial credibility score, our vision is that it will be calculated on-chain, governed by its participants, and adapt to how the community’s opinion about credibility changes. This requires a journey to get to that point, and we intend to introduce these concepts over time. We have already imagined ways to introduce light-weight governance on how credibility score weighting can be determined by those who participate.

Other Credibility Scores

We’ve created these mechanisms in reviewing, vouching and slashing with the intent of anyone being able to observe and create their own formulas for how credibility is calculated.

Just like morals and ethics differ between cultures, we expect people to want to measure credibility differently for different use cases. The Ethos credibility score is intended to be a generic source of truth for who can be trusted, but we’d love to find ways to extend the primitives of the platform to other scores too.

If you’re interested in chatting more about creating your own credibility score, please reach out to us directly on Twitter.

You can also join the waitlist for Ethos here: waitlist.ethos.network

The idea was simple:

• When a user signed up for friend.tech from Twitter, the app created a “private chat” for that user.

• Other users would buy those keys to gain access to that chat, providing the unique ability to connect with crypto influencers and knowledgeable participants who were, otherwise, out of reach.

• Most importantly, friend.tech designed these keys on a bonding curve, meaning every time a user bought into the private group, the price of the chat’s key increased. This meant the most influential people had very expensive keys.

This idea quickly extended its reach beyond crypto- anyone from NFL legends to TikTok influencers could join friend.tech, create a private chat, and give fans a chance to connect with them directly. A truly unique, novel, and interesting new product had emerged in Social-fi. Deep in the bear, this caught people’s attention quickly.

A few weeks in, Paradigm announced that they had invested—and the game changed. Not only was this a new and compelling product that captivated the market, but Paradigm knew how to incentivize early usage of protocols and reward them with tokens.

This attracted farmers wanting an early shot at a potential future token (points, which later became $FRIEND) - and money flooded into friend.tech. As people scrambled to buy up different keys and lock money into the contract to yield farm, they quickly ran into a problem: whose keys do you buy?

Due to this bonding curve, key’s price could be volatile. In the same way the price increased when users purchased a key, it could just as quickly decrease when users sold their key.

Top keys would quickly rise to a few thousand dollars, but people realized something quickly: that person’s key price was directly tied to their reputation. What if they did something that others didn’t agree with? What if they launched a project and pulled the rug? That key price was likely to come screaming back down.

Users suddenly had to consider financial risk when it came to buying into someone’s key and their associated reputation.

Farming required trust

In order to farm the protocol for points, there needed to be trust in people, their keys, and their reputation.

If you wanted to farm points with 1e, you wouldn’t dare buy a key of someone you didn’t know, especially considering it could drop to 0.1e if that person did something irreputable.

This kicked off the era of (3, 3) on friend.tech, which is a reference to “The Prisoner’s Dilemma.” In a (3, 3) relationship, two users agreed to buy each other’s keys, increasing the price of each of their keys. This allowed them to cooperate and yield farm with less risk. If either of the parties exited the (3, 3) relationship, people recognized that as defecting from cooperation. This was generally frowned upon unless both parties agreed to exit the relationship (or stop farming) together.

So in order to farm in friend.tech, you had two options:

1. Buy a key of someone you trusted or who was “noteworthy” (e.g. an influencer, or a user with an already valuable key)

2. Enter (3, 3) relationships with your friends, drive your key price up, and farm “safely”

As people evaluated what keys to buy or what relationships were worth entering, users started building dashboards on top of friend.tech’s transaction data. These dashboards provided insightful information on evaluating the reputation of other friend.tech users. Who had defected from (3, 3) relationships? Who had done it the most consistently? Many dashboards even went as far as to define a “quality score” to use when deciding whose key to buy or enter a (3, 3) with.

This was our first glimpse at a “credibility score,” and has been a huge inspiration for what we’re building at Ethos.

Credibility Instrumented

The game of (3, 3) also attracted people looking to make a quick buck.

Since it is difficult to judge people’s past credibility in crypto, we have often leaned on poor evaluations like how many Twitter followers a user had to evaluate if they should be trusted.

This led to bad actors entering (3, 3) relationships with multiple people to help drive up their key price. Once they convinced dozens of people to buy their key, these bad actors would dump all the keys they held to make a profit, defecting on all of their (3, 3) relationships.

This behavior isn’t surprising in crypto, but for the first time there was documented, onchain proof of a bad actor’s behavior.

This is when I realized how impactful friend.tech could be if:

1. Credibility could be measured onchain and

2. Credibility was hard to spoof because of

   1. unique identities tied to public profile on Twitter

   2. economic security in the price of keys

I vividly remember tweeting about it. It was my “aha” moment for what made me so bullish as a trader on friend.tech:

https://x.com/0x5f_eth/status/1706341407672148477

This was the top of (3, 3) mania, when friend.tech’s TVL was at an all time high, and when the grifters starting piling in. People pumped and dumped their keys, and even though it was now measurable, there was still a significant loss of capital in those scams. It became clear that we needed additional instrumentation, alongside the bonding curve, to help show who could be trusted.

https://x.com/0x5f_eth/status/1711168295963881627

These two tweets are the origin story of Ethos. It’s when I reached out to my co-founder Ben, who decided to leave his web2 career because he too saw the opportunity to help tackle the most important problem facing crypto today: onchain fraud and scams, and how that ultimately hinders further adoption.

What did we learn from Friend.tech?

Friend.tech opted not to lean into (3, 3) or any of the credibility components and focused exclusively on launching their token and expanding their room key use cases.

It turns out that, for most people, the (3, 3) logic combined with the bonding curve meant that the capital risk of trusting someone was too much to bear. Additionally, the relationships created unique challenges for well-intentioned users who were trying to exit their farming positions when friend.tech started to lose attention. These honest “exits” muddied the data on defections and their “credibility scores.” Unfortunately, the fidelity of onchain reputation data fidelity was lost.

Friend.tech indirectly gave us insight that in crypto:

1. Economic security (aka backing someone with “capital”) has the ability to bolster someone’s reputation and credibility, and

2. That documentation of past positive and negative experiences onchain is extremely valuable for future evaluation of credibility.

With Ethos, we’ve tried to tackle these concepts head-on.

To address economic security, we’ve introduced the idea of “vouching.” Instead of buying keys on a bonding curve, users stake eth against people who they trust.

For documenting trust and reputational signals without the financial aspect, we’ve brought a simple review system on-chain.

And for calling out and reprimanding people who step out of line? We just borrow from the Proof of Stake slashing model for Ethos.

With your help vouching, reviewing and slashing - combined with other metrics - we’ll be able to produce Ethos credibility scores for every participant. An easy, succinct way to evaluate trust. We can rewrite financial incentives from fraud and grift to more meaningfully reward crypto’s most reputable participants.

Join the waitlist today.

Market the project on Twitter, ensuring it has a reputation that appears credible, trustworthy and, most importantly, popular. You need to generate excitement, increase followers and engagement, and have your audience hyping up its launch.

How do you spend the $20? Do you buy Twitter Ads? Offer your favorite influencers a dollar each to tweet about your project? Do a single $20 twitter giveaway to those who “like and follow?”

How do you build an impressive level of Twitter presence?

You buy it. For $18 on a “social media panel.”

First, you buy your 22.1k followers for $9.94

And for your official project announcement tweet? You buy the engagement:

• 224 retweets for $0.05

• 234 likes for $0.05

• and for a staggering 159k views (usually a strong signal for crypto twitter!) a whole $0.015. That’s right. One and a half cents.

That means for just 11 CENTS a tweet, you can make it look like you have the reach of any top crypto account in the space.

This “spoofed” credibility is one of the easiest ways to market projects today and unfortunately leads to extraction of money out of Crypto through scams and fraud. New participants join and their eyes jump immediately to these metrics as a way to measure popularity of an up-and-coming project. Whether it be engagement metrics on Twitter, likes on TikTok, or members and activity in a Discord, social media panels have found endless ways to sell you popularity, cheaply.

Economic Security

One of the ways that Twitter claims to eventually solve this spam problem is by requiring all users to pay a fee to read, engage and interact on Twitter. This introduces the idea of economic security, where to participate on Twitter as an individual, you have to pay out of pocket as opposed to being able to freely spin up many accounts. With economic security, Twitter becomes more secure because they’ve introduce a financial barrier to participating. Previously 22.1k followers cost $9.90, with economic security, 22.1k followers of bots would cost the marketing company alone $176k monthly to manage and operate.

https://x.com/elonmusk/status/1779930065469383166

The increase in price (from free) means that Twitter can start to separate signal from noise if they require all users to pay $8/mo.

This isn’t a new concept; one of the major ways that we combat physical spam mail today is through charging a minimum postage fee for every letter that is sent. It’s a small cost ($0.68 per stamp) but if it’s an ad agency trying to reach a million potential buyers of a product, it quickly creates a significant cost increase for reaching that audience with spam (68 cents each versus the few cents it costs to print the letter.)

We believe that economic security is essential to accurately measure trust and credibility in crypto.

When Ethos launches, you will see a novel take on an ordinary reviewing system. Ethos introduces the idea of vouching which brings that concept of economic security to credibility and reputation.

When you vouch someone in Ethos, you’re required to stake Ethereum against their name. We believe this provides the ultimate signal to the rest of the network that the person you vouched for can be trusted by putting your money where your mouth is.

Vouching is the strongest source of credibility in web3 because it works the same way crypto does. Transparent financial incentives between peers makes the entire market stronger. This means that becoming credible on the Ethos network requires capital, from someone else vouching for you, just like Twitter will eventually charge $8/mo to be engage on their platform. We believe that by combining economic security with a user’s social reputation, we can get the most clear signal of who can be trusted and who can’t.

Soon, crypto participants will look to Ethos profiles to better understand who is credible and trustworthy in the space. Instead of projects buying retweets, likes and views for $0.11, they will need to build up their credibility on Ethos through both user reviews and reputable participants vouching for their credibility.

This creates that layer of “defense” for Ethos in economic security.

Based on decades of security experience, Ethos' CTO and co-founder Ben Walther will tell you, “Complete protection against all attacks is impossible. Our job is to make it prohibitively expensive for attackers.”

How do we determine if a project or person has credibility, is reputable, or can be trusted in our daily crypto lives?

For a large part of crypto investing, we don’t. We quickly throw money at the latest cat memecoin, the NFT that promises a future token, or the game that ensures you they’ll have a promising economy powered by their token.

And that’s odd because traditional investment philosophy would have you thoroughly picking through balance sheets, listening to earnings calls or talking with a portfolio manager about upcoming opportunities. Investment decisions used to be calculated, thorough, and researched - sometimes over weeks and months.

Today we see Twitter talking about how a derivative of “cat wif hat” called “shark cat” is the BEST cat memecoin and is definitely going higher than $WIF in the next 3 days. Given the fast-paced nature of crypto, many traders forego this research in fear of missing out.

We rarely stop and say: Who’s behind it? What do they intend to do with it? Are the founders reputable? Do the founders have successful experience starting a memecoin? Is the developer actually from North Korea, with a backdoor to the smart contract?

That’s a classic “mid-curve” mentality and we often drop detailed research in favor of quick action.

The reality is: determining credibility is incredibly difficult in Web3, and it’s challenging to do any research at all.

And without it? I’d argue we’re simply gambling, not investing.

The trust signals we evaluate today

“You should check out this guy @CryptoGodJohn, he runs a group called WealthGroup that’s made me thousands of dollars!” says your favorite TikTok account.

How do you evaluate if this is wise advice? You probably start with his Twitter and dissect as much info as you can from his profile.

To a crypto newbie who learns from TikTok, the “fact” this account has 667k followers and millions of views on his tweets gives a strong perception of credibility. Surely @CryptoGodJohn is a huge influencer who knows what he’s talking about. He has helped all of those people make money, right?

Maybe not. The reality is, getting signal from Twitter profiles is extremely difficult, and the vast majority of metrics like followers, views, comments, retweets and likes can be purchased for pennies.

The only major signal we get from Twitter is “who do I follow that follows them?”

That implies two things, though:

1. You are active on Twitter and follow people you trust

2. You trust that a follow of that user by someone you respect is meaningful

Ultimately these signals are weak, hackable and - too often - used as a tool to imply credibility in a person or project where it is missing entirely.

In lieu of Twitter, how do we build trust?

The truth is, the most successful crypto participants rely on the opinions of the people around them - the people they trust the most.

Communities, private chats and “alpha groups” with friends are common on Discord and Telegram, as these provide safe avenues to discuss projects and their potential success.

If someone from your inner circle has vetted the project, knows someone on the team, or has reasonable confidence that the project won’t pull the rug from underneath us, we can use that as our proxy for trust and ultimately decision making. Your community has provided consensus.

Let’s continue our evaluation of @CryptoGodJohn with this in mind:

Given his metrics on Twitter, you might think of buying into a project of his or listening to his advice. The amount of mutual followers is typically a green flag, however his stats indicate he likely purchased many of his metrics, including those followers. That green flag should turn to a red flag.

So what’s the next best step to evaluate him? See what your friends think of him.

And, what do the most credible people in the space say about him?

As it turns out one of the more credible people in the space has denounced him and says he’s a known scammer. That is likely the most refined, researched and informative piece of information you could uncover when determining if you should trust a person or project in crypto. Community consensus, from trusted and credible sources.

Our best proxy: Reputational Backing

When friend.tech first launched, it had a few notable people sign-up but really didn’t capture significant attention. A couple of weeks of enthusiasm slowly waned as the minor initial interest wore off.

Two weeks later, it was announced that Paradigm invested in their round. Coinbase started tweeting about them, too. It instantly built credibility for the project, attracted points farmers, and sent their TVL through the roof. All with Racer, their CEO, and team being fully anonymous to their users.

One of the best ways that projects or people today are legitimized is through someone significant investing in the project- whether that be a VC, a known angel, or someone with influence in the space.

That’s great for giving us more signal to the market, but it centralizes reputation and credibility. A select few investors, funds, or angels can “king-make” what they invest in. We call this Fund Consensus instead of community consensus. The community’s say is diminished and we steer further away from decentralization.

We can do better

Our metrics, tools, and ability to observe and calculate who can be trusted in crypto are primitive.

So long as financial incentive aligns more with being a grifter, people will abuse the inefficiency of how we measure and evaluate trust. Until we change this, we will continue to be challenged by onboarding and retaining new users onchain.

With Ethos, we can bring concepts like community consensus onchain to make trust in crypto more observable, measurable and transparent. We can help people more deeply understand who they’re dealing with, what the history of someone’s reputation is, and who is vouching for and backing those people or projects.

We can create a new kind of proof, “Proof of Credibility,” to extend this knowledge beyond just word-of-mouth. A clearly indicated Ethos score that helps people quickly understand who can be trusted and who can’t.

We can make reputational backing community powered, not consolidated to a centralized select few.

Boost the signal, remove the noise.

This Summer on Ethos.

• Should I buy this product because MKBHD made a YouTube video that reviewed it positively?

• Should I hire this babysitter for my child because they had a high rating on care.com?

• Should I get in the car with this anonymous-to-me Uber driver?

• Should I choose this doctor to check on my heart condition because another doctor strongly recommended them?

• Should I hire this front-end developer contractor to work on my new product because they were well reviewed on Upwork?

Many of these determinations are made through what we call community consensus. An objective way to determine a rating, agreed upon by a large sample of people. We can then quickly and clearly see things like:

• 483 Amazon reviews with 4.8 stars.

• A 4.9 passenger rating in Uber that proves you’ve taken 72 other rides and never lost your lunch in the back seat.

• A mechanic should be avoided because they have multiple negative Google reviews saying they overcharged people for services they didn’t need.

These measurements make trust more objective.

Yet, in web3, trust is entirely subjective. We struggle to measure and document reputation and credibility in web3 - often with great financial loss/risk - and that makes operating like a modern society inherently difficult.

So let’s walk through a few places where web2 community consensus exists today and how those could be brought into the daily lives of web3.

TrustPilot has become one of the top sites to both review and consume reviews for businesses and services. The premise is simple: how much do other people trust that business? This gives an opportunity for customers to be heard, for businesses to build reputation, and for prospective customers to make an educated decision.

TrustPilot is as simple as it gets - leave a review on a scale of 1 to 5. Include a written response. Give the business the opportunity to respond to it, and let everyone see the aggregated reviews. Now you have a scoring system for how consumers perceive these businesses and services that’s easy to interpret at a glance.

That scoring system then becomes how they appeal to their customers - a trusted and safe business with testimonials from members of your community. Community consensus.

Uber’s success is entirely dependent on its rating system. It takes us one step closer to web3 where two anonymous (to each other) parties need to interact to exchange a service. As a rider, you expect to be matched with someone who’s going to drive safely and get you where you intend to be in a timely manner. As a driver, you might be looking for a quiet passenger who respectfully closes the car door instead of slamming it.

Both drivers and passengers have ratings and reputation that you build up over time - and poor rating passengers then get matched with poor rating drivers. This ensures that the best clientele get matched with the best drivers - a trusted system that’s built on community consensus. That Uber driver might have over 9000 ratings at 4.9 stars, and the community has thus determined them fit for driving Uber’s best passengers.

These reputations measured in Uber are incredibly important for both parties. Ruin your reputation, and you lose access to wages as a driver or access to the service as a rider.

eBay as an ecommerce platform was the epitome of The Wild West when the internet was just getting its footing. Fully anonymous sellers and buyers exchanging goods over the internet was instantly fraught with fraud, especially in the late 90s when the internet was a bit more… naive. It wasn’t until eBay started adding feedback scores - a way for you to review the counter-party for every transaction - that they built enough trust on the platform to reach the success they have today.

Being a reputable seller on eBay helps build confidence from the buyer that the item’s condition will be accurately described, that it will arrive on time, and that the seller will communicate well through the process. eBay has even offered significant incentives to their fee structures for sellers who qualify for their “Power Sellers” programs. Why? eBay needs trusted sellers. It’s critical to their business success, just like Uber and their trusted drivers.

What’s our point here?

We rely on credibility and community consensus in many aspects of our day-to-day lives, in real life and online.

That credibility and community consensus is missing and uninstrumented in web3.

Proof of Credibility, coming soon from Ethos.

“Reputations will be of central importance, far more important in dealings than even the credit ratings of today.” - Timothy May, The Crypto Anarchist Manifesto, 1992

The Crypto Anarchist Manifesto, written over 30 years ago, was our original North Star for cryptocurrencies and blockchain technology. Timothy May and the original Cypherpunks in the early ‘90s laid out the foundation for Bitcoin, smart contracts, DeFi and NFTs.

That foundation was always rooted in unlocking functionality- a peer-to-peer cash system that was decentralized and anonymous. The speculative upside in the value of that asset was considered an inherent side-effect, and to many early cypherpunks, a “necessary evil.”

Many of us today revel in this speculative upside; there has been significantly more financial opportunity in cryptocurrencies than in most speculative marketplaces over the past two decades. That opportunity also breeds greed and fraud, which has grown exponentially in the last few years. From the original days of Bitconnect & Thodex, to the ICO-mania of Pincoin and iFan, to the more recent days of SquidDAO, AnubisDAO and countless NFT “soft-rugs,” fraud is now ingrained in the culture of crypto.

In fact, TRM estimates that over $9.04 billion was stolen globally in crypto fraud schemes in 2022, a notable increase in volume from 2016.

And thus, the sentiment around cryptocurrencies is typically quite negative: 75% of US investors say they do not believe that the current ways of investing or trading crypto are safe or reliable.

Since crypto was built on the foundation of pseudonymity, and with the recent surge in financial greed, it’s become more obvious than ever that we’ve still missed on May’s original manifesto: Reputation is an unsolved problem.

Today it’s even easier than ever to grift, rug-pull, exit scam, shill, front-run or insider trade than 15 years ago. The financial incentives of being someone with no reputation significantly outweigh having any reputation. Together those two realities bring us to where we are today: significant, widespread fraud.

As a recap:

• The space has swung from function (cryptocurrencies) to greed (financial gain.)

• Public consensus agrees crypto is not safe.

• The ease of fraud has become exponentially easier and more lucrative recently.

• Reputation in the space is still not valuable.

So we ask:

• How can we possibly gain true mass adoption of crypto against the current paradigm?

II. History

In the 1600’s, Thomas Hobbes rooted his social contract theory in the idea that man was eternally self-interested.. naturally cruel and fueled by greed. He believed that the rules and standards that society abides by (eg. “a social contract”) would never be in the interest of others. Man was evil and brutish to Hobbes, and would only protect his own natural rights. Sound familiar?

Hobbes concluded that the correct form of government was an absolute monarchy- a single person to look after everyone. Government was needed to protect man himself. That style of governance is society mostly played out across the globe for the majority of ancient history.

John Locke later challenged this Hobbe’s beliefs, stating that man was inherently moral, reasonable and good. Locke believed that humans cared about progressing as society as opposed to just their individualistic needs- and thus would self-govern through accountability for one another. Locke suggested that how society governs was dictated by a want to benefit the general public, not a need.

Hobbes: Self Interest & greed → Need centralization & authority*Locke: Selflessness and collectiveness → Self governance through social contracts*

Crypto started in the early days of Cypherpunk-ism with a Lockean approach to social contract theory. A new avenue for currency, a new function for modern society that did not operate on the premise of a single centralized “monarch.”

However in the last few years, we’ve shifted away from that, going back to our brutish Hobbesian views of self-interest and greed where financial incentives align mostly with self-interest. We’re back in the Wild West, where it’s more lucrative to rob trains and pillage towns than it is being an upstanding citizen.

We believe that we must significantly progress as a crypto society to reach global crypto adoption. We simply cannot do that with the current Hobbesian state of nature that acts in self-interest above all. We need accountability, trust, reputation, credibility, morals... it’s important that we rewire our ethos back to our roots.

III. Solution

The role of reputations--common in business and interpersonal dealings--is generally ignored in the academic crypto community, who end up tearing their hair out over extremely complicated protocols that attempt to avoid issues of reputation and economic incentives. - Timothy May, 1993

It’s now 2024, and we’re still stepping over the reputation problem. Why? It’s an incredibly difficult problem to solve in an objective or calculated manner.

In modern society outside of crypto, we’ve progressed to a point where credibility, reputation and networks are valuable. They’re how you get a job, how you choose a doctor, how you get matched with an Uber driver or how you choose to buy a product on Amazon. Some of these are objective (your 4.9 star rating on Uber) and others are subjective (how applicable is your experience for this job?)

We still haven’t found a good way to implement these measures into the fabric of how crypto operates today.

Except, maybe it has been right under our nose this whole time…

More recently in crypto history, many chains have started to adopt Proof of Stake, which rewards consensus through validation. Given a set of rules, validators ensure the chain follows a set of commands:

• Validators confirm consensus in accordance to those commands? They’re rewarded with tokens.

• Validators confirm actions that are errant to those commands? They get slashed; they’re punished for negative behavior and they lose tokens.

• Validation through staking introduces security of the network through token price, making it expensive to attack the network and break consensus.

Over time, those validators have built up their own reputations based on objective measurements like uptime, rewards and amount of slashings.

By bringing each of these mechanisms of Proof of Stake together, we believe it may help us solve our reputation and credibility problem, too.

People acting as social validators.

As a thought exercise, consider if we replace “validators” with “people:”

• Staking in people can help show who can be trusted. Those people can now help define consensus around social transactions.

• Slashing people can help reprimand bad actors who step out of line social consensus.

• Rewarding people for work done in providing that social consensus.

By introducing financial upside and downside into reputation, just as Ethereum validators do today, we can:

• Protect reputation through financial security (ie. it is sufficiently expensive to fake reputation and credibility)

• Make reputation itself be inherently valuable (ie. reputation and credibility are instrumented, measurable and can be appropriately rewarded)

• More easily observe societal interactions (ie. who is connected to whom, when and under what circumstances)

And with each of those, we can start to shift financial incentives from grift & anonymity to credibility & reputation.

IV. Thesis

The Ethos thesis is that by adapting Proof of Stake to use people instead of validators and apply that to social interactions instead of transactions, we can create “Proof of Credibility” which can enable a more trusted, transparent and safe place for peer-to-peer interactions onchain.

Ethos Labs is taking the first stab at this by building the Ethos Network.

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