Leveraging Social Tokens for Digital Reputation

The more the lines are blurred between our digital and physical lives, the more our digital identities will become more complex. Our work is already being done almost exclusively online, having internet friends has become commonplace, and we're slowly tending toward a moment where our digital life will become just as consequential as our physical life.

By Eliot Couvat - Feb 15, 2022

The more the lines are blurred between our digital and physical lives, the more our digital identities will become more complex. Our work is already being done almost exclusively online, having internet friends has become commonplace, and we're slowly tending toward a moment where our digital life will become just as consequential as our physical life.

Everyone will eventually have to play the Great Online Game, and the questions around digital identities will become (if not already) central in our society.

In this context, we'll have to explore different tools to better measure and reflect the quality of our exchanges online, encompassing the entirety of our online presence. In my opinion, web3 wallets will play a considerable part in this future by seizing the opportunity of doubling down on social tokens.

What is Identity?

Before getting into what is needed to measure better our online identity, it's essential to clearly understand what is included in our idea of identity.

In the physical world, we can use our driver's license as a way to prove our Identity, but it doesn't really tell us much about a person. To get to know a person, you might ask shared acquaintances, Google them, have a conversation about their favorite things, etc. Identity is complex and multifaceted. Our identity is more than just the core vital stats - name, serial number, and rank. Our identity is constantly evolving, and there isn't one "true self," but many sides to our identity, which we employ depending on the context (at work, on Twitter, with friends etc.). To get to "know" someone, you need information from all of these areas. And only then will you get a sense of who they really are.

That is why I believe our online identity will be decentralized. With decentralization comes interoperability, enabling us to bring our data from one platform to another, resulting in a much better user experience. Decentralization will also allow for easy access to all of our data scattered across web3, simplifying how we manage it all.

Now, we need the tools and the interfaces that will allow us to manage everything easily. What we need today are better wallets.

What traits should a wallet have?

The future of wallets won't only focus on transactions, but will be native tools built around personalization, navigation, interoperability, and integrating strong social components. They will reflect much more of who we are and be inherently social.

These new web3 wallets, such as Rainbow, as opposed to current traditional wallets such as Metamask, will be much more like your email address or your LinkedIn than your bank account. You'll share your wallet with colleagues and platforms so they can contact and identify you. Your wallet will be decentralized, created by you, and you'll control the data you want to share and the experiences you want to highlight by granting, revoking, and sharing partial access to it.

For wallets to better reflect the entirety of our online Identity, we'll need them to prioritize the quality of our interactions over the quantity.

Today, wallets are building their user experience around the quantity of transactions. They're building their product in a way that makes it easy for anyone to see if you've attended an event (by leveraging POAPs, for example), but almost impossible to tell if you've actively participated. They allow anyone to see if you've voted on a proposal in a DAO, but don't create the right experience for others accessing your wallet to see if you've read what this proposal was all about and if you had a strong opinion on it.

No wallet showcases beautifully which communities and DAOs you're a part of and how involved you are in those communities. The tech is already here, and it's easy to envision a system where the more active you are in a community, the more skin in the game you have. Some platforms, such as Coinvise, have already implemented such features focusing on social tokens better to reflect the quality of work and implications in communities, but what's lacking is the design component and the context around it.

My profile on Coinvise where you can see which tokens I hold and therefore which communities I'm involved.

My profile on Coinvise where you can see which tokens I hold and therefore which communities I'm involved.

With our life and our work happening more and more online, it seems essential to refine how our online Identity is showcased and find new ways to measure and reflect the quality of our work and interactions online.

This is why wallets should double down on social tokens.

Social Tokens as a Measure of Digital Reputation

Social tokens are already widely used today.

Contributors working for DAOs today receive social tokens proportional to the good work they accomplished. For example, with KPI options, contributors will be paid more if a project's KPI reaches predetermined targets before the given expiry date. The better they work, the more tokens they receive. Another example is Coordinape, which allows DAO leaders to create "Gift Circles," enabling contributors to collectively reward each other depending on the value they perceive from each other's work.

In the JUMP community, a community for agency professionals and brand marketers who are passionate about web3, DAO leaders have implemented "tips," where any member can reward another by sending them social tokens through a tool called Collab.land. In Water & Music, a research DAO building the innovator's guide to the music business, active members have been rewarded through airdrops (proportional to their involvement).

The problem is, with current wallets, users have no easy way to show their tokens to others. Web3 wallets optimizing for social tokens -- creating a dedicated space for them and allowing users to manage them easily (hide, showcase, etc.) -- community members could bring their reputation across DAOs, allowing DAO leaders to assess the candidate's value upfront, better assess their needs and experiences, and onboard them to projects accordingly.

Why aren't social tokens widely used for reputation yet?

While we don't yet have the wallets I've envisioned, some emerging wallets are already pushing in the direction of better ways to measure reputation through showcasing NFTs.

While this is a great step forward, we need new wallets to recreate and improve these kinds of experiences with social tokens, which offer far more granularity than NFTs and are already used daily in tokenized communities to measure quality of work.

While very promising, though, we still have many problems to overcome before social tokens can become an effective reputation system.

First, we still have to overcome technical blockers and find ways to get a full picture of a person's identity while they navigate across ecosystems (blockchains, platforms etc.). Rainbow is already tackling this problem by allowing their users to see all of their tokens, even from different blockchains, in one place.

Second, today, one can buy tokens and increase their reputation and voting powers, which is unfair for those who worked hard to earn tokens. We would need a system to differentiate the 'Purchased Tokens' and the 'Earned Tokens.'

Every individual token has a history on-chain. This history could surface important information about its holders and how they received it. Earned tokens could be received in return for contributing to a network or community. Purchased tokens would be what they sound like: tokens purchased through any exchange or from another individual. Differentiating between these is a feature that I encourage every wallet to focus on.

Third, we need a way to differentiate "reputation tokens" from "salary tokens." For now, when contributors get paid in tokens for their work, there's no way to get cash them out or spend them without selling their reputation. The easy solution would be to create two tokens, one for paying salaries and rewarding community members and the other for governance power and perks within the community, but this solution poses its own problems. For these reasons, we need to find a clever and novel way to differentiate between these use-cases.


In Web3, people will use multiple wallets as multiple identities, and some identities will be made up of multiple people. With these new challenges, new wallets will have to adapt, and social tokens offer far more granularity in how we're measuring the quality of our online interactions than today's solutions.

I don't think future wallets should exclusively optimize for social tokens but rather incorporate them better to track the quality of interactions and use all the other available tools such as NFTs and POAPs as well.

Given the emergence of the metaverse, which will require identities to be moved from one area of the metaverse to another, it's essential to think thoroughly about these questions and analyze the possibilities of social tokens to measure experiences more in-depth.

Share article


Weekly Newsletter straight to your Inbox