Introduction
The GUILDS project is developed by Uncommon Digital (the company behind Uniscrow) and funded by the 2 Open Call of TruBlo european project (grant agreement No. 957228). GUILDS goal is to build a decentralized trust and reputation system for online business and freelancing.
GUILDS will be a protocol and a suite of tools for transparent, immutable and auditable reputation and dispute resolution systems.
The system is blockchain-based and makes use of 2 other key concepts from the crypto space: DAOs and TCRs.
Before entering in the project details it is necessary to understand what DAOs and TCRs are.
Note: Throughout the text we use the all-capital word GUILDS to refer either to this project or to the protocol itself. We use the form with first uppercase letter “Guild” to refer to a single instance created and managed by GUILDS protocol, and the form “guild” for the meaning of the word according to English dictionary
What is a DAO
DAO is an acronym for decentralized autonomous organization. A DAO is essentially software running over a decentralized network that incorporates governance and decision-making rules and therefore it is a form of organization that is managed through rules programmed in smart contracts.
The purpose behind a DAO is to design an organizational structure that could work independently of a traditional hierarchical management.
More details about DAOs can be found in a previous article.
What is a Token Curated Registry (TCR) and a Guild
“Token-curated registries are decentralized curated lists with intrinsic economic incentives for token holders to curate the list’s contents judiciously” (Goldin, 2017). The lists in the TCR system may be made up of everything: professionals, universities, restaurants, websites, videos, etc.
The fact that it is a curated registry makes the content of the list reliable.
A Guild is a curated list where the items listed are the same members curating the list. Participants care about the overall reputation of the list because it affects their personal reputation directly.
The GUILdS Project
The GUILD project business idea is based on the fact that remote and freelance work is booming and it is estimated that by 2030 80% of the workforce will operate in such condition. In 2019, the revenue of the US 57 millions freelancers has reached 1 trillion USD.
A large amount of transaction is taking place through centralized job boards.
Centralized job boards
Centralized job boards manage the reputation of the users and are a key factor to find new jobs. However, at any moment the user account can be closed or the reputation score can be reset by a centralized action, e.g. if the user does not pay the monthly membership fee.
The core issue is that the reputation information is not owned by the user and therefore cannot be transfered to another system, should he decide to move to a different platform.
It cannot even be exported.
Years of valuable client reviews on the user’s work would be lost causing him a significant damage.
Additionally, centralized platforms charge high commissions, in the worst case, as much as 30%. There is also a long history of vulnerabilities in centralized online reputation management systems that makes difficult to consider their reviews trustable.
Hence, there is the need of decentralised technologies to support such kind of systems.
How GUILD works
The GUILDS project makes use of a DAO for the governance of the reputation registry in a decentralized fashion. The system is implemented as a blockchain-based registry (a TCR) of workers profiles.
GUILDS is decentralized, autonomous and based on a tokenomics model. So, no central authority is in charge of management tasks. Only the members of a Guild have the right to peer review the applications of new members and establish a vetted environment.
A Guild is started by founders which endorse it with their own reputation and brand. Users will benefit from being members of the platform, but they must meet some integrity, conduct and reputation requirements.
Financial incentive and game theory
The game theory behind the system will converge to a fair and motivated set of members that will manage the registry.
An applicant applies for the Guild membership against an amount of native token of the Guild put at stake.
The members are then asked to vote for the inclusion of a new applicant. Votes are backed by financial stakes and the game theory behind will converge to a steady condition where only fair and motivated applicants are accepted.
The platform tokenomics allows the members to be rewarded for the work they do.
Dispute resolution
The GUILDS protocol prevents misconduct and acts as a decentralized resolution center in case of disputes between a customer and one of its members. Dispute management adds a great value that makes reputation a concrete value and trust easier to build. The platform handles also disputes among members.
Conclusions
The GUILDS project will allow to implement decentralised platforms aimed at managing any kind of registry through a DAO backed by a game theory and a tokenomics that will make the system converge to a stable and sustainable environment that is able to ensure the quality of the registry content.
In the specific case of a freelance registry, the platform will allow the portability of reputation data, dispute resolution and protection against vulnerabilites thanks to the decentralized architecture.