After DeFi, look for the soul of Web 3

Web 3 shocked the world by forging a parallel financial system of unprecedented flexibility and creativity in less than a decade. Cryptographic and economic primitives or building blocks, such as public-key cryptography, smart contracts, proof-of-work, and proof-of-stake, have formed a complex and open ecosystem for expressing financial transactions.

However, the economic value of financial transactions is generated by humans and their relationships. SinceWeb 3 lacks primitives for representing such social identities, it has fundamentally relied on the very centralized Web 2 structures it aims to surpass, replicating their limitations.

For example, the lack ofWeb 3-native identity and reputation forces non-fungible token (NFT) artists to often rely on centralized platforms like OpenSea and Twitter to promise scarcity and initial provenance, and prevents partially-collateralized forms of lending. Distributed Autonomous Organizations (DAOs) that try to go beyond simple token voting often rely on Web 2 infrastructure, such as social media profiles, to resist Sybil attacks (one or a few entities masquerading as more entities). Many Web 3 players rely on custodial wallets managed by centralized institutions such as Coinbase. No wonder: decentralized key management systems are not user-friendly for all but the most complex.

In our paper, we illustrate that evensmall and incremental steps in using Web 3 primitives to represent social identity can resolve these issues and bring the ecosystem closer to the regenerative marketplace and its support in native Web 3 environments. interpersonal relationship.

More promisingly, we highlighthow native Web 3 social identities with rich social compositionality can make huge strides in Web 3 on broader, long-standing issues around wealth concentration and governance vulnerability to financial attacks, while spurring cold Wu Ji's innovations exploded with political, economic and social applications. We refer to these use cases and the richer, diverse ecosystem they support as the Decentralized Society (DeSoc).

soul token

Our key primitive is an account holding publicly visible, non-transferable (but potentially revokable by the issuer) tokens. We chose this set of properties not because they are obviously the most desirable set of features, but because they are easy to implement in the current environment and allow important functionality.

We refer to accounts as "souls" and the tokens held by accounts as "soul tokens" (SBT). Despite our strong interest in privacy, we initially assumed these would be publicly visible, as it would be technically easier to validate as a proof of concept, even if limited by the subset of tokens users are willing to share publicly. Programmable private SBTs are the next step we discuss below.

Imagine a world where most participants have souls that store SBTscorresponding to a series of affiliations, memberships, and credentials . For example, a person might have a soul that stores SBTs representing educational credentials, companies they have worked for, hashes of artwork or books they have written, etc. In their simplest form, these SBTs can be "self-certifying," similar to the way we share information about ourselves in resumes. However, when a soul holds an SBT it can be shared by other The true power of this mechanism is revealed when souls are issued. These opponent souls may be individuals, companies, or institutions.

For example, a university may bethe soul that issues SBTs to graduates. The stadium may be the soul of handing out SBTs to Dodgers baseball fans.

Note that souls do not need to be associated with legal names, nor do any protocol-level attempts to ensure "one soul per person". Soul may be a persistent alias with a chain of SBTs that cannot be easily linked. Nor do we assume the intransferability of souls between humans. Instead, we try to illustrate how these properties emerge naturally from the design itself when required.

soul loan

Perhaps the greatest financial value built directly on reputation is credit and unsecured loans.

Currently, the Web 3 ecosystem cannot even replicate the most primitive form of unsecured lending, since all assets are transferable and sellable - thus only a form of collateral. Traditional financial ecosystems support many forms of unsecured lending, but these are often mediated by centralized credit scoring mechanisms — on the grounds that borrowers with poorer credit have no incentive to share information about their creditworthiness.

But such scores have many flaws. At best, they opaquely overestimate and underestimate credit-related factors and favor those who have not accumulated enough data, primarily minorities and the poor. At worst, they can enable Black Mirror-style opaque "social credit" systems that engineer social outcomes and enforce discrimination.

SBT's ecosystem can unlock censorship-resistant, bottom-up alternatives to top-down commerce and "social" credit systems. SBTs, which stand for educational credentials, previous employment history, and lease contracts, to name a few, can serve as durable records of credit-related history, allowing souls to avoid collateral requirements by gaining a meaningful reputation for loans. Loans and lines of credit can be represented as non-transferable but revocable SBTs, so they are nested within the Soul's other SBTs - a sort of (non-seizable) reputation collateral - until they are repaid and subsequently destroyed (or, Better yet, be replaced with proof of repayment with added soul credit history). Think of it like a note on your credit history.

SBTs provide useful security properties: non-transferability prevents diversion or hiding of outstanding loans, while the presence of a rich SBT ecosystem ensures that borrowers attempting to evade loans (perhaps by spinning new souls) will lack SBT to make sense risk their reputations.

The ease of usingSBT to calculate public liabilities will lead to an open source lending market. New correlations between SBT and repayment risk will emerge, leading to better lending algorithms to predict credit, thereby reducing the role of centralized, opaque credit scoring infrastructure. Even better, lending may occur in social connections, leading to new forms of community lending. In particular, SBT could provide the basis for "collective lending" practices similar to those pioneered by Nobel laureate Muhammad Yunus and the Grameen Bank, in which members of a social network agree to support each other's debts. Because a soul's SBT constellation represents membership across social groups, participants can easily discover other souls who would be valuable co-participants in a group lending program. Commercial loans are a “loan first and forget” repayment model, while community loans may adopt a “loan first and subsidize later” approach, combining working capital with human capital to achieve a higher rate of return.

don't lose your soul

The non-transferability of keySBTs - such as educational certificates issued once - raises an important question: How do you not lose your soul? Today's recovery methods, such as multi-signature recovery or seed phrases, have different trade-offs in terms of mental overhead, transaction convenience, and security. Social recovery is an emerging option that relies on a person's relationship of trust. SBT allows for a similar but broader paradigm: community recovery, where the soul is the cross-vote of its social network.

Social recovery is a good starting point for security, but has some flaws in terms of security and usability. Users manage a group of "guardians" and grant them the power to change wallet keys by majority. Guardians can be individuals, institutions, or a mix of other wallets. The problem is that users must balance the desire for a reasonable number of guardians with the precautions that guardians come from discrete social circles to avoid collusion. Additionally, guardians may die, relationships deteriorate or people simply lose touch, requiring frequent and laborious updates. While social recovery avoids single points of failure, successful recovery depends on establishing and maintaining trustworthy relationships with a majority of guardians.

A more robust solution would be to link soul recovery to membership of souls in a community, not curated, but utilizing the broadest possible real-time relationships for safety. Recall that SBT stands for membership in different communities. Some of these communities — such as employers, clubs, universities, or churches — may be more off-chain in nature, while others — such as participating in protocol governance or DAOs — may be more on-chain. In the community recovery model, recovery of a soul's private key requires the consent of members of the soul community (a qualified majority of a random subset). As with social recovery, we assume that individuals have access to a wider range of secure off-chain communication channels than the chain itself, where "authentication" (through conversation and sharing of shared secrets) can take place.

Maintenance and recovery of Soul's cryptographic property requires Soul Network's consent. By embedding security in social, community recovery can deter soul theft (or sale). Souls can always regenerate their keys through community restoration. Therefore, any attempt to sell a soul would lack credibility, as the seller would also need to prove that they sold the restoration relationship.

Programmable plural privacy

The most valuable data is not necessarily personal, but interpersonal (e.g., social graphs) or only valuable when pooled in larger groups (e.g., health data). Advocates of “self-sovereign identity,” however, tend to treat data as private property: the data about this interaction is mine, so I should be able to choose when and with whom to reveal it. But the data economy is poorly understood in terms of simple private property compared to the real economy. Even in simple two-way relationships, such as illegal affairs, the right to disclose information is usually symmetrical, often requiring mutual permission and consent. The Cambridge Analytica scandal was mostly about people revealing the attributes of their social graphs and friend information without their consent.

Rather than treating privacy as a transferable property right, a more promising approach is to view privacy as programmable, loosely coupled bundles of rights that allow access to, change, or profit from information. EverySBT—whether the SBT represents an affiliation, membership, credential, or access to a facility—also has implicit programmable property rights specifying access to the underlying information that makes up the SBT: the holder, the Agreements, shared property or assets, and obligations to third parties, to name a few. Some issuers and communities choose to make SBTs fully public, such as SBTs that reflect information in public resumes. In the atomic sense of verifiable credentials, some SBTs will be private, most will be somewhere in between.

SBT presents privacy as a programmable, composable property right that can be mapped to the complex set of expectations and agreements we have today. Even better, SBT also helps us imagine new configurations, because privacy (as a property right over access to information) can be combined in an infinite number of ways to create a nuanced cluster of access rights.

For example, SBT can enable holders to run computations on data stores that may be collectively owned and managed by souls, using specific privacy-preserving techniques. Some SBTs may even grant access to data in such a way that computations can be performed across data stores, but the content can only be proven with third-party permission. This may be useful for instantiating and representing SBTs of "serial voting" mechanisms, where votes are counted for each soul, but votes should not be proven to anyone else to prevent vote-buying.

SBT can manage a healthier form of "attention economy", enabling souls to filter spam from possible bots outside of their social graph, while elevating communication from real communities and desired intersections. This would be a huge improvement over today's communication platforms, which lack user control or governance and auction off user attention to the highest ad bidder, or even bots. Listeners become more aware of who they are listening to and are better able to assign credit to insightful pieces.

Such an economy can optimize for positive-sum cooperation and valuable contributions rather than participation.

Albert Einstein told the Disarmament Conference in 1932 that "man's organizational faculties" had failed to keep pace with "his technological progress," leaving "a child of three with a razor in his hand." In a world where his observations seem more prescient than ever, learning how to plan for a future built on trust—rather than replacing it—seems imperative for humanity to survive on this planet.