Let’s talk about trust for a second.

It’s a funny thing. On one hand, trustless systems like blockchains are a good thing because you don’t need to rely on people and corporations “doing the right thing;” you can simply control everything yourself. But on the other hand, human society is inherently dependent on trust.

Whether you want to participate in trade, make a deal with a new client, or even get dropped home safely by your Uber driver, trust is an integral part of society, whether we like it or not.

The issue with blockchains is that even though it’s a great way of establishing distributed consensus in a largely trustless way, the incentives in such a system are horribly skewed.

Take the memecoin meta, for example.

The amount of scamming and rug-pulling that happened in crypto in 2024 and so far in 2025 has been unholy. Why? The incentives to do so are there. In an anonymous and trustless world, morals are not required. Malicious actors know that there will be no consequences for their actions, so they have the incentive to keep scamming.

It seems that as an industry, for every step forward, we take two steps back. It's been 16 years since Bitcoin launched, and we’re still very much in the “Wild West” phase.

For true progress and to actually have the masses comfortable with interacting with blockchains, the crypto industry needs to figure out how to implement trust systems within a trustless system, as weird as that sounds.

The topic of today’s discussion, Ethos Protocol, does exactly that: It implements an on-chain trust and reputation system.

What is Ethos Protocol?

Ethos is a trust and reputation protocol for the on-chain economy designed to be the trust layer for the crypto industry.

Ethos serves as an individual base layer protocol that generates credibility scores for users based on social validation. With this as the base, dApps, and interfaces can very easily integrate with the Ethos Protocol and have legible credibility for all users.

Now, this sounds like a tough thing to implement. It’s like Google Reviews but for on-chain participants. Hence, seven different mechanisms are in place to ensure maximum reliability.

1. Review

This is the first step of the process.

Leaving reviews on Ethos is identical to leaving reviews on any other online platform. You can choose to leave negative, neutral, or positive reviews.

They are very lightweight and easy to do. It’s almost second nature to the online experience. Before eating at a restaurant, you check how many stars it has. After sitting in an Uber, you quickly give it a star rating and click on some tags.

Yes, they are not the most reliable, but since they’re easy to do, you get a vague idea of quality.

Similarly, implementing this for crypto participants can very easily be sybilled. Still, if there are enough genuine actors, it can at least act as an early sign that there might be something wrong with the person in question getting the bad reviews.

However, to ensure maximum reliability, there are some checks and balances in place for the review system.

• Reviews from high-credibility users will have more impact.
• A user who only puts either positive or negative will have their review weightage reduced.
• The age and volume of reviews will matter.
• Vouching will play a big role.

2. Vouch

The vouching mechanism is pretty much putting your money where your mouth is.

On the Ethos web app, you will be able to see all the different registered Ethos profiles. Through the app, you can stake your ETH with a specific profile as a ‘vouch’ for their credibility.

The amount staked with a profile matters the most because it’s a higher signal of trust over a simple review.

The platform will initially only allow staking ETH, but the plan is to implement more assets in the future.

Another mechanism in place is the concept of a mutual vouch. So, if you vouch for someone and they vouch for you back, then the platform recognizes the relationship as a mutual vouch, which boosts credibility and rewards. But what happens if the person you vouch for turns out to be an impostor and ultimately pulls off a scam?

The first thing to do is unvouch. This is the process of unstaking your funds, which can be done at any time. Note that you can also unvouch a portion of your funds if you don’t want to remove the whole thing. However, the main course of action will be slashing.

3. Slash

With proof of stake, validators can vote to slash the stake of other validators who they believe are malicious actors. If this is found to be true, the entire stake of the accused is slashed, which acts as an economic incentive to be honest.

The same concept is applied here.

Any user can act as a whistleblower and accuse another participant of unethical behavior. This will trigger a 24-hour lock on staking and withdrawals for the accused participant and the voting process commences.

Over here, the accuser can assign a nominal reward to validators, which will then bring in some human validation, where people can verify for themselves whether the accusation is valid or not. If the unethical behavior is verified, the accused will have their stake slashed, and the accuser will receive a reward. If the accusation is invalid, the accuser gets slashed.

But there’s more.

Ethos also introduces the concept of social slashing. The process is very similar, but instead of staking your ETH, you can stake your reputation and credibility on an accusation. If the accusation is valid, your credibility score increases, and if it is false, your credibility takes a hit.

4. Invite

Now, the big question remains: How do you prevent sybils? While it’s almost impossible to completely stop them, they can be limited. Invitations are one way to do this.

Creating an Ethos profile can only be done via an invitation. The invitation is done by invoking the ‘invite’ function on the app, which allows an invitation to be given to a specific Ethereum address.

Once the invitation is accepted, a 90-day bonding period is created between the inviter and invitee.

During this bonding period, the inviter earns 20% of the invitee's score, whether positive or negative.

This forces people to be careful about who they invite. If they invite bad actors, their score will ultimately be impacted negatively, whereas if they invite a reputable person, their score will increase.

Invites will be limited initially as the Ethos team aims to control the number of people using the platform, but eventually, once the protocol has been sufficiently tested, it will open up.

5. Attest

A major element of this setup is being able to actually verify that people are who they say they are.

The attestation process allows them to do this while maintaining their pseudonymity.

The idea is that people link the other ways they present themselves online to their Ethos identity. So, their social accounts, online identity, and other wallets can all be linked to the Ethos profile. So if you’re an anon with Twitter, you can link that anonymous Twitter account and still not reveal your real identity.

It is completely free to do an attestation, but if a user does a fraudulent one, they will face a major penalty in the form of both financial and social slashing.

Verifying different types of online accounts will require some form of action. So, if you’re verifying a Twitter account, it may involve posting a certain tweet to prove ownership. If you’re verifying a GitHub, then it may involve making a specific commit.

The same applies to wallet verification. You will be required to sign a transaction, so there is verifiable proof on-chain that you actually control that wallet. And yes, multiple wallets, including multi-sig wallets for DAOs and protocols, can be attested to one Ethos profile.

Reputation stems from communities, and by attesting your pseudonymous online identity to your Ethos profile, you are allowing all participants to know your reputation.

6. Profile

The Ethos user profile is ultimately the hub for all activities and information on Ethos.

The first element is the credibility hub. The credibility hub of a user profile provides a detailed summary of all the important credibility cues, including high-stakes vouches, high-profile reviews, and large financial backing.

Beyond this, users can also get a more detailed breakdown of an Ethos profile and learn about things like social circles, allies, kept or broken promises, and so on.

The second element is the chain station, which deals with the different actions that a user can perform on Ethos. These include vouching, attesting, and leaving reviews.

The action will be recorded on-chain after the user signs the transaction. The entire idea is to keep things compact and easy to use.

The last and arguably the most important element of the protocol is the credibility score.

7. Credibility score

The credibility score is a way to quantify the different credibility indicators.

Every profile has an assigned credibility score, which indicates the user’s reputation. This score is like an on-chain version of a credit score that banks use to determine how reliable an individual may be when giving out loans.

The calculation of the credibility score is done through an algorithm that takes into account the following weighted indicators:

• Number of vouches, mutual vouches, and amount vouched
• Mutual vouch duration and defection
• Credibility score of vouchers and reviewers
• Average rating of your participation on Ethos
• Account ages of attestations

Based on this, a score is generated. Every user starts at a default neutral score of 1200, and it then changes based on the aforementioned indicators.

This is what the ranking system looks like:

• 0-799 - untrusted
• 800-1199 - questionable
• 1200-1599 - neutral
• 1600-1999 - reputable
• 2000-2800 - exemplary

This credibility score will be viewable on every profile and acts as an ‘at a glance’ indicator of a users credibility.

Ethos.markets

This is where things are really taken to the next level.

Everything described so far is just the backdrop to a market where people can trade based on social reputation — The Ethos Reputation Market.

Allow me to elaborate.

An Ethos profile will have a market attached to it. Of course, the number of markets will be limited initially because it will be very difficult to have a market for every single Ethos profile, but it works based on trust scores.

Trust scores are represented as percentages and fluctuate based on whether trust/distrust tokens are bought or sold.

So, to trade a certain profile's reputation, users can either buy trust tokens or distrust tokens based on which way they believe the market will go eventually. So let me give you an example.

You see Hayden Davis’ account from Kelsier Ventures, and it has a trust score of 80%. You know about the Argentina memecoin scam he pulled along with the others, so 80% is way too high.

You buy distrust tokens in the Hayden market, expecting that trust score to go down dramatically. Eventually, once it reaches your target, you can exit for a profit.

These markets operate under the traditional AMM model but are perpetual. They are perpetual in the sense that there is no final settlement date since you can’t tangibly resolve trust.

It implements Polymarket’s algorithmic pricing mechanism to price the market, but there is no final settlement date.

However, down the line, there are some changes that could come.

Firstly, derivatives can be built on top of this product to create markets that close. For example, there can be markets with dates. For example, “by the end of March 2025, Vitalik will have a trust score of 75%.” Markets like these can be resolved.

The second thing to keep in mind is that the reputation market has a graduate function. This means that if any new algorithmic pricing technology comes around in the future, Ethos can easily implement it.

Concluding thoughts

Look, is this the perfect solution? I'm not sure; we'll have to wait and see how the protocol is used and adopted before making that decision.

But one thing that I can say for certain is that the problem Ethos is looking to solve is a very real and important one.

If we want to see real adoption, this is one of the biggest barriers to overcome. We cannot attract people to this industry when every mainstream headline is about a hack or a memecoin rug.

We want anonymity and trustless systems, but there also needs to be some form of accountability in place because the cost of being moral in crypto is simply too high.  Why be honest when you can just rug and retire with no consequence?

Once we fix this problem, we should be able to move ahead with ease. Ethos is one of the pioneers in making sure this problem is fixed and, therefore, is worth checking out.

As always, stay safe, and happy degening.