Definition ∞ A Reputation-Based System is a framework where a participant’s past actions and interactions within a decentralized network determine their standing and influence. Positive contributions or reliable behavior accrue a higher reputation score, granting greater privileges or trust, while negative actions diminish it. This system aims to incentivize honest conduct and cooperation among anonymous or pseudonymous participants. It serves as a social deterrent against malicious activities.
Context ∞ The application of Reputation-Based Systems is a significant area of research for decentralized autonomous organizations (DAOs) and decentralized finance (DeFi) to move beyond purely token-weighted governance. A key discussion involves designing robust and censorship-resistant reputation metrics that are difficult to manipulate or game. Future developments aim to integrate these systems with verifiable credentials to build more accountable and trustworthy decentralized communities.
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