Reputation Systems in Web3: Building Trust in Decentralized Networks

Organizational structures are shifting from classical hierarchical firms from before the emergence of the Web to e-commerce firms in the Web2- and most recently to Web3-based Decentralized Autonomous Organizations (DAOs), due to blockchain technology. A DAO is a decentralized organizational network, which runs fully autonomously, is governed by code and benefits the ones who contribute. The latter should be ensured by a reputation system. Hence, fraud-resistant reputation systems play a central role in DAOs, ensuring a fair give and take by detecting malicious peers like free riders. However, some of the most commonly used e-commerce platforms and DAOs show design flaws in their reputation systems. Therefore, this master thesis identifies and summarizes components of fraud-resistant reputation systems in decentralized networks to provide starting points for further scientific research. To this end, Web2-based e-commerce platforms as Airbnb and eBay together with Web3-based DOAs as Bitcoin, Steemit, Token Curated Registries, uPort, Sovrin, Augur und DAO Maker are analyzed and described in this work.<div><p>Organizational structures are shifting from classical hierarchical firms from before the emergence of the Web to e-commerce firms in the Web2- and most recently to Web3-based Decentralized Autonomous Organizations (DAOs), due to blockchain technology. A DAO is a decentralized organizational network, which runs fully autonomously, is governed by code and benefits the ones who contribute. The latter should be ensured by a reputation system. Hence, fraud-resistant reputation systems play a central role in DAOs, ensuring a fair give and take by detecting malicious peers like free riders. However, some of the most commonly used e-commerce platforms and DAOs show design flaws in their reputation systems. Therefore, this master thesis identifies and summarizes components of fraud-resistant reputation systems in decentralized networks to provide starting points for further scientific research. To this end, Web2-based e-commerce platforms as Airbnb and eBay together with Web3-based DOAs as Bitcoin, Steemit, Token Curated Registries, uPort, Sovrin, Augur und DAO Maker are analyzed and described in this work.</p></div>