[Chapter 4] Use of KEY for Distributed Reputation – Update 2020 HODL & BUIDL

In today’s chapter we want to give you a quick introduction to the concept of using KEY for Distributed Reputation.

1 Apr
Identity Wallet
SelfKey Identity Management paper

In an identity system, a reputational element is almost essential. Looking at powerful peer to peer networks (even some that are somewhat centralized such as Airbnb or Uber) a rating system is an important mechanism to signal trust, and reward good behaviour on the network. 

The SelfKey staking system is designed to be verifiably tied to identity attestation processes. Each time an identity attribute takes a ‘full trip’ of being self attested, verified by a certifier and re-verified by a relying party, there is confidence gained in this corresponding claim.

This has several benefits. Firstly, the identity owner is now perceived as more trustworthy. Secondly, if the identity owner should misbehave, there is a larger stake to hold them accountable. Thirdly, staked reputation provides and increases identity owners’ eligibility for receiving token rewards.


Examples of events which could increase a participants reputation score include placing a KEY deposit when registering a DID, making a successful purchase of a product on the SelfKey Marketplace or voting on a community governance platform. An example of an event where a reputation score would decrease is losing a dispute handled by the arbitration process.

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How can reputation be tied to the economy of the SelfKey network?

A reliable mechanism to prove identity is by providing the proper documents or verifiable credentials to a relying party. However, at some point, client-side components that are able to explore the chain of transaction events might infer some sort of reputational score for a given identity. This type of reputation must be built with desirable properties of anonymity and privacy that should be satisfied in any self-sovereign identity system.

The KEY token can be used to bolster the reputation of a network participant while not allowing direct manipulation of their score through arbitrary staking.  There would need to be adequate thresholds in terms of how much a financial stake can improve a reputation score and this would also be dependent on the type of participant and what their role on the network is.