❓Why Credit DAO?

Background

Web3 stunned the world by building a parallel financial system with unprecedented flexibility and creativity in just ten years of trail. Cryptographic and economic fundamentals, such as public key ciphers, smart contracts, proof of work and proof of stake, have led to a complex and open COCOS system to express financial transactions.

However, the economic Jiahui of financial transactions is generated by humans and their relationships. Because Web3 lacks an original language to represent this social identity, it has become fundamentally dependent on the very centralized WEB2 institutions it seeks to transcend, replicating its limitations.

We highlight how indigenous WEB3 social identities (with their rich social calming properties) can make much progress on broader long-term issues related to wealth several and governance vulnerability to financial attacks, while also stimulating an explosion of innovative political, economic and social applications coming to the Cambrian. We refer to these cases of USC and the richer multiplicity of systems that are known as decentralized societies (DeSoc).

Our current marketplace is like a train, not so much Web3, but Web2.5 at best, from the regulation of TornadoCash to the DAO vote to liquidate the whale are evidence of the drift from the original goal of blockchain. This train is loaded with DeFi, GameFi, NFT and various ownership restitution concepts, highly financialized and extremely wealth-creating effects to attract countless train chasers, in the long run we may gradually lose faith in the industry and become blind to profit under the endless hacking, witch attacks and the lure of money. Especially in a crypto world where assets are mobile and penalties are lacking, the pursuit of more profit may become the only pursuit of Web3 residents. Pure financialization will not be conducive to the continued development of the industry as a whole, and the worse case scenario is that new technologies will lead to another shuffling of wealth, i.e. an industrial revolution followed by a centralized system wrapped in the sugar coating of decentralization.

Vitalik has chosen to put a new track on this car by adding the Soul Bond Token (SBT) solution, thus steering the entire Web3 towards a change from Web2.5 to a true Decentralzied Society, DeSoc, a decentralized society. A truly decentralized society, DeSoc, is highly combinable. Instead of the top-down model of a centralized government, the society is constructed by returning ownership to the individual and spreading outward, thus forming a bottom-up, people-oriented social system. In this social system, wealth is no longer concentrated, individual ownership is recognized and respected, and identity is no longer a black-and-white birth certificate, but a network of relationships consisting of one event and one relevant person.

In the real world, a large number of behaviors constitute word of mouth, and word of mouth generates original trust, which is what SBT wants to quantify and achieve through technology. The non-transferable feature gives SBT a certain credibility, and over time, and with the accumulation of a large number of SBTs, it can gradually develop into the credibility of the account, thus giving the account a certain characteristic. The SBT proposal is to issue SBTs as proof of participation in every event, whether online or offline, so that over time, combined with the transactions and interactions on the chain, each account can be bound to a growing person rather than just a wallet. Perhaps, single events and proofs can be easily faked, but as time accumulates, the more complex features are difficult to be copied, and a large number of credible features are enough to constitute a "person" with high authenticity.

The emergence of SBT is sufficient to fill this gap and give the crypto industry more possibilities.

Credit DAO's SBT-CDP is a great idea and a systematic design that uses the unmodifiable nature of the blockchain to continuously overlay all kinds of data on people, especially costly and time-intensive data. ", when the threshold for falsification and replication will be infinitely high, too high to be worthwhile, after reaching a critical point in terms of coverage of population weight, data diversity, and time span.

This is something that has a network effect, proving each other's authenticity through extensive connectivity. The SBT protocol is designed to prevent the soul from "going off the grid" or "changing the grid" through a network of relationships, and the soul is also a node of the grid, strengthening the power of the grid, fighting against the pull, and keeping the truth.

In addition to offline communities, which are "offline communication channels", sovereign states and sovereign institutions are in fact the most effective off-chain authorities for authentication, which make the model look less decentralized and less DeSoc, but absolutely have to face their role and put them into the model in a reasonable way.

The above summary hints at a viable path to avoid over-financialization of Web3, rewarding trust and cooperation while protecting the network from attacks, bloodletting and manipulation.

Of course, there is no absolute sense of innovation from scratch. The important value of this paper is to combine and sublimate the existing concepts and methods at the right time, as an authority, to give the Web3 industry an overall consensus and a way forward. It is foreseeable that the consensus and protocols based on SBT will spawn subsequent concepts, methodologies, cultures and applications, which will be a milestone for the development of the industry