Author(s): Stanislav Stolberg
The advent of Web3 technologies, leveraging block chain and smart contracts, promises a paradigm shift toward decentralized and autonomous economic interactions. However, the lack of robust trust and reputation mechanisms among pseudonymous participants hinders its evolution into a fully functional economic system. This paper introduces the Dmany Nexus Protocol, a decentralized reputation system that quantifies user trustworthiness through verified on-chain and off-chain actions, addressing critical issues of information asymmetry, moral hazard, and adverse selection inherent in decentralized networks. Building upon the live data and insights from the Dmany Quest Engine, the Nexus Protocol integrates advanced principles from information economics, game theory, and mechanism design to develop a quantifiable reputation metric the Social Capital Score (SCS). This metric aggregates multiple facets of user behaviour, employing sophisticated anti-collusion algorithms and zero-knowledge proofs for privacy preservation. Unlike existing solutions, the Nexus Protocol offers a standardized, interoperable, and tamper resistant reputation system that enhances economic efficiency and fosters mass adoption by enabling secure, privacy-preserving interactions among pseudonymous actors. Empirical analyses demonstrate that the protocol effectively mitigates security risks such as Sybil attacks and reduces information asymmetry, leading to improved task quality and reduced fraudulent activities in decentralized platforms. By establishing a foundation for trust and cooperation in the Web3 ecosystem, the Dmany Nexus Protocol significantly advances the potential for scalable and efficient decentralized economies.