This op-ed first published on Cointelegraph, posting it in here on my personal blog too

Trust is the bedrock of human interaction, a fundamental element that shapes our relationships, business dealings, and societal structures. Yet, in our rapidly evolving digital world, 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 or during a networking session. These encounters are more than just casual conversations; they're the seeds of trust being planted between two individuals. Conferences, meetups, and even 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. In essence, trust and the coordination mechanisms that facilitate its growth are crucial for creating new positive value in our personal and professional lives.

The problem - It doesn't scale

However, 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 being 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 is serving, as an Automatic Market Maker- a smart contract that facilitates that value creation by coordinating the price discovery and token exchange.

We could potentially unlock the same value for stuff that are less tangible, like business opportunities, and professional relationships. But it's really hard to imagine that happening. It's hard because trust is not something that you can scale very easily.

Scaling trust

Enter on-chain reputation - a concept that potentially could extend trust through provable, irrevocable, and verifiable credentials. Imagine a future where our reputation exists on a blockchain, immutable and transparent. Things we know, places we’ve been, things we built, or products we bought, people we know and most importantly on this piece context - people we trust, or trust us.

What possibilities could this unlock?

In this blog I wrote about the way on chain reputation can come into play when we're thinking about the scaling of trust problem in a structured and programable manner.

We're not starting from scratch though. We already carry a substantial backlog of off-chain reputation, compiled from IRL relationships we already have, and from various platforms & apps we use daily. People we work with or have social relationships for one. Then our social graphs on networks like Facebook, LinkedIn, Twitter, TikTok, and Instagram; our work-related profiles on marketplaces like Fiverr and Upwork; even our consumer scores from loyalty programs at Starbucks, or driver score on Uber - all contribute to our digital reputation.

The challenge lies in bridging this web2 reputation with the emerging web3 ecosystem. This 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 on-chain reputation, we could:

• Leverage 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

• 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 are seeking anchors of trust to guide their most important decisions. On-chain reputation could provide that anchor, offering a verifiable and scalable trust mechanism.

Imagine a Tokenized future

The future is undeniably on-chain. Everything that can be tokenized, will be tokenized. By embracing on-chain 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 crucial to consider both the opportunities and challenges that lie ahead. How will we balance privacy concerns with the need for transparency? How can we ensure equitable access to these new trust mechanisms? These are questions we must grapple with as we build this new trust infrastructure.

In conclusion, on-chain reputation represents a paradigm shift in how we establish, maintain, and scale trust. It's not just about technology; it's about reimagining the very fabric of human interactions in the digital age. As we move forward, let's embrace this potential while thoughtfully addressing the complexities it brings. The future of trust is on-chain, and it's ours to shape.

If you’re interested to dive deeper into the world of onchain reputation, we have created the RepuRepo - a curated a list of projects building in this space, and a list of research papers and articles that can help you dive into this rabbit hole

About the Author Lior is the founder of Covariance and a veteran web3 builder focused on solving coordination challenges in the crypto ecosystem. Previously Head of Platform at Collider Ventures where he supported 20+ portfolio companies, and former corporate finance executive turned DAO maximalist. His journey from traditional finance to web3 began in 2019, leading him to win the Ocean Data Economy Challenge with DataDAO and drive growth initiatives during DeFi Summer. Lior brings unique insights from bridging traditional business expertise with web3 innovation.

About Covariance Covariance is pioneering "Go-To-Network" - a web3 native approach helping projects scale through incentive-aligned networks of super connectors. The platform enables contributors to unlock value across ecosystems while sharing in the upside they help create. Through its seasonal cohort model, Covariance connects vetted projects with curated networks of web3 professionals who can accelerate their growth through high-value introductions and opportunities.

Projects looking to supercharge their growth through Covariance's network can apply here.
Web3 professionals interested in joining Season 2 as contributors can learn more here.