The future of trust is onchain

Opinion by: Lior Goldenberg, founder of Covariance

Trust is the bedrock of human interaction, a fundamental element that shapes our relationships, business dealings and societal structures. In our rapidly evolving digital world, however, we face a pressing challenge: How do we scale trust beyond our immediate circles?

Consider the simple act of meeting someone new at a conference. These encounters are more than just casual conversations — they’re the seeds of trust being planted between two people. Conferences, meetups and introductions in chat groups serve as coordination mechanisms, bringing previously unconnected people or companies together and facilitating the growth of these trust seeds.

The value of these trust-building interactions cannot be overstated. They can lead to discovering your next business partner, friend, employee or investor. Trust and the coordination mechanisms that facilitate its growth are critical for creating new positive value in our personal and professional lives.

Trust doesn’t scale

We face a significant hurdle: trust doesn’t scale. It’s bound by age-old biological human limitations — the time it takes to build trust and the size of our trust networks, reminiscent of Dunbar’s number. This constraint has long been a bottleneck in our increasingly interconnected world.

Market makers beyond financial markets

Value is created when supply and demand meet and an exchange of value is created, similar to how market makers in the liquid markets facilitate and connect between a sell order on one end and a buy order on the other. Think of the function Uniswap serves as an automatic market maker — a smart contract that facilitates value creation by coordinating price discovery and token exchange.

We could potentially enable the same value for less tangible stuff, like business opportunities and professional relationships. It’s tough to imagine that happening. It’s difficult because trust is not something that you can scale very quickly.

Scaling trust

Enter onchain reputation, a concept that could extend trust through provable, irrevocable, verifiable credentials. Consider a future where our reputation exists on a blockchain, immutable and transparent. The things we know, places we’ve been, things we built, products we bought, people we know, and most importantly, in this context, people we trust or who trust us.

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What possibilities could this unlock? Onchain reputation can come into play when we’re thinking about scaling trust problems in a structured and programmable manner.

We’re not starting from scratch, though. We already carry a substantial backlog of offchain reputation, compiled from real-life relationships and various platforms and apps we use daily. 

People with whom we work or have social relationships, for one. Then, our social graphs on networks like Facebook, LinkedIn, Twitter, TikTok and Instagram, and our work-related profiles on marketplaces like Fiverr and Upwork. Consider the inclusion of our consumer scores from loyalty programs at Starbucks or driver scores on Uber. These could all contribute toward our digital reputation.

The challenge lies in bridging this Web2 reputation with the emerging Web3 ecosystem. That is where innovations like web proofs, powered by zkTLS technological development, come into play, offering a means to verify Web2 data and make it accessible on Web3 rails.

In this new paradigm of onchain reputation, we could use our reputation to access personalized discounts and unique offers delivered directly to our digital wallets, monetize the value of the data we create through DataDAOs, and uncover hidden business opportunities by analyzing who should interact with whom, based on indirect and direct trust relationships.

As we navigate a world increasingly dominated by AI agents, people seek anchors of trust to guide their most important decisions. Onchain reputation could provide that anchor, offering a verifiable and scalable trust mechanism.

A tokenized future

The future is undeniably onchain. Everything that can be tokenized will be tokenized. By embracing onchain reputation, we’re not just solving the problem of scaling trust — we’re unlocking a new frontier of human interaction and value creation.

As we stand on the brink of this transformation, it’s vital to consider the opportunities and challenges ahead. How will we balance privacy concerns with the need for transparency? How can we ensure equitable access to these new trust mechanisms? We must grapple with these questions as we build this new trust infrastructure.

Onchain reputation represents a paradigm shift in establishing, maintaining and scaling trust. It’s not simply about technology. It’s about reimagining the fabric of human interactions in the digital age. The future of trust is onchain, and it’s ours to shape.

Lior Goldenberg is the founder of Covariance. Previously, Lior served as the head of platform at Collider Ventures. After entering Web3 in 2019, he won the Ocean Data Economy Challenge with DataDAO and drove growth initiatives during DeFi Summer.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.