foreign
[Music]
thanks for being here so early in the
morning so my name is William George I'm
a mathematician and a researcher for
declaros cooperative and indeed I'm
going to be talking today about economic
incentives uh and souls in the sense of
soul-bound tokens these kind of social
layers people are trying to add to
ethereum to get Beyond just kind of
limited Financial logic particularly in
the context of shelling point-based
oracles
which close is an example of so I'll
briefly Begin by describing plaros which
will sort of like
give a sense of the kind of examples
we're interested in so claros is a
blockchain-based dispute resolution
platform uh what that means is that so
imagine you have a small business owner
who hires a freelancer uh and they put
the payment for the free Lancer into an
escrow on a smart contract and then if
the smart business owner is happy with
the work of the freelancer she'll just
click a button and say okay great and
release the money from the escrow but if
she's not then what happens in Claro's
is that um there's a crowd-sourced pool
of people who are willing to rule on on
whether the freelancer did good work and
you pick some random selection of them
uh and then they're incentivized to vote
um for who was right in a given dispute
based on what we call as a shell but a
shelling point or a focal point so the
idea is that they're incentivized to be
coherent to vote the same way as kind of
the broad Community consensus that
ultimately the Oracle produces and then
any given participant looks at the case
thinks okay I think the small business
owner has the honest
position here and more I think everybody
else all the other jurors people in the
community are going to think that the
small business owner was right so I want
to vote for the small business owner
because I think everybody else is going
to vote for the small business owner
because it's the distinguished decision
and they all expect me to vote for the
small business owner and ultimately this
boils down to a
notion of shelling points or focal
points this is an idea introduced by
Thomas shelling in the 1970s uh shelling
went on to win the Nobel Prize that uh
selling points are solutions that people
tend to use when trying to coordinate in
the absence of communication because
they seem special or natural so here we
have like a table of
coordination game where everyone wants
to either vote for x or I'll vote for y
but they just want to vote for the same
thing and then what people tend to
coordinate around are kind of special
seeming Solutions uh so here in Clarence
we think of honest resolution disputes
as a kind of as a shelling point or a
focal point
um others blockchain oracles that use
this include of ideas related to this
include ogre enuma uh so Claus is a kind
of like Oracle specifically designed for
dispute resolution but more broadly you
can think of it as just being designed
for the subjective decisions people need
to make on a blockchain uh so another
aspect of the title of my talk is
souls and sold down tokens so for those
of you who aren't familiar I'll briefly
introduce them so the defining feature
of Soul bound tokens uh and these are
introduced by in this paper
decentralized Society finding web 3 sold
it was published a few months ago by
while olhaver and budrin uh so these are
tokens that first of all are
non-transferable
uh and generally are thought of as
representing some social aspect of
people uh like maybe you finish a course
in blockchain from from some like online
course and you get a diploma from that
course like it doesn't make sense to
transfer that to somebody else like you
have a diploma representing your
knowledge
um maybe you win an award uh for for
your your good work uh so these are
things that represent some aspect of
identity about you and an interesting
thing that the authors of this paper
discuss is that you can have negative
Soul bound tokens so like a running
example that they particularly consider
involves it's trying to enable
undercollateralized loans so by adding
this sort of richer notion of identity
you can have kind of enough information
about somebody to judge whether they're
credit worthy and should be given an
under collateralized Loan in a kind of
similar structure to how banks in the
traditional world work uh because we
have this richer notion of identity but
then if you don't pay your loan on time
maybe you get a soul bound token that
says you know late payments and then
going forward you kind of have to
present people the bad with the good you
can't get rid of the negative sell down
tokens short of burning the whole wallet
and starting over with a new identity uh
but when you present your wallet to
someone they'll be able to see okay they
won this award and had this this uh this
diploma but uh he had a late payment and
they make sort of a balances kind of
evaluations on your identity using all
this information together uh so a
related concept that has to do with sort
of social layers on blockchains but is a
little different uh is something called
proof of personhood so particularly uh
the Claro's team developed proof of
humanity which is an example of a proof
of personhood protocol so this is
supposed to be a civil resistant tool
it's a registered list of of human
beings such that no human being can be
able to get more than one identity on
the list uh and if there's another
dispute about whether someone has a
duplicate profile or doesn't meet the
criteria that triggers a Claris dispute
uh so how this works is that you submit
this video saying that I'm a real human
and I'm not already on the richest trade
uh and then you provide a deposit and
you go into like a pending submission
challenge period where if somebody
challenges you it'll result in dispute
but if nobody challenges you or you win
your eventual dispute you eventually get
on the list
um but if you're not a human being or
you're a duplicate uh then you when you
submit to the list then this
decentralized ecosystem of Challengers
will say no you don't you know you know
you don't satisfy the rules and this
will raise a Clarence jury that rules in
the same kind of subjective
Oracle way that I described before using
selling points uh okay so now sort of an
interesting thing about proof of
humanity is how people remove themselves
from the list uh and they do that by
providing another video they provide a
video that says Okay I want to remove
myself uh and what's interesting about
this is that maybe in a future version
of proof of humanity if you had a
soul-bound wallet uh that um has your
various cell bound tokens in it then
maybe it's tied to your proof of
humanity profile address and if you
remove yourself and resubmit with a new
address it can just automatically point
to the new profile and this allows like
a very interesting kind of social
recovery
um like rather than just having social
recovery based on you know your friends
saying that you are who you say are now
you're being verified by this like broad
community and moreover this has an
interesting sort of philosophical point
about how we think of identity on
blockchains normally we think of
someone's core identity as having a
private key that allows them to sign
some messages but here what's
fundamentally defines your ability to
interact with these slow down tokens is
your ability to make these videos which
is a bit different uh so that that's
something interesting another way that
these proof of personhood ideas relate
to slow down tokens is that um how gets
to questions about how you distribute
subout tokens to begin with so I imagine
they'll someday be a rich ecosystem of
slowdown tokens they will be distributed
potentially in different ways a sort of
a natural thing to do is if there's an
institution that can attest to whatever
you like aspect of your identity the
solvent token represents then it would
just issue to that directly like you
come to Devcon and get a pull-up and
like some organizer sign some message
saying yep she was here pulp awarded
into the auto appears automatically in
your wallet maybe your blockchain based
like course online has some some
University attached to it and they sign
something and give you your spt
um but like maybe you don't the
institution that's like naturally giving
out the tokens it would test your
identity just isn't equipped for this
they're not very blockchain friendly
moreover maybe there's some aspect of
some sobound token that doesn't
naturally have an institution behind it
and something you could do is create a
career a list similar to how proof of
humanity Works where you claim that you
deserve a cell bound token you say I'm
an expert in subject X you submit a
deposit you do the same kind of thing
people can challenge you you provide
your portfolio
like previous Works proofs of your
expertise uh and if you make it onto the
list you get a sellbound token saying
that you're an expert
okay so now I'm going to change switch
gears a bit and talk about how these
social layers interact with the kinds of
Economic Security models that we
traditionally have in a lot of crypto
economic systems uh and my two running
examples here will be Claro's Euro
selection and quadratic funding which is
the sort of motivating example of a lot
of the decentralized society paper uh so
how does your selection currently work
in claros well people stick a token and
then each token has an equal chance of
being drawn and you kind of are forced
to do that if you don't have another
form of civil resistance because if you
try to give people like unequal weight
uh say people that have tons of tokens
or like weighted quadratically or
something then people would have an
incentive to just cut up their tokens
over multiple addresses to try to
pretend to be different people uh so
you're kind of stuck with this like
linear odds of being drawn in terms of
weight and then every time you draw
someone the odds of the next draw don't
change like in any given draw that that
45 person still has 45 percent uh and
then you can look do sort of a binomial
distribution calculation and look at the
total odds that the you know like a
large sticker will get a majority of the
votes on a given case uh so that's an
economic security system uh whose
security model basically boils down to
not and no one having more than 50
percent of the stake uh and um
particularly like Clarence has an appeal
system without going into too much of
the details you can get larger and
larger panels of jurors and particularly
if you have a really large panel of
jurors it is very unlikely that anyone
would be able to get a majority of the
votes on that panel without actually
having 50 of the stake
okay so that's like a purely Economic
Security model uh quadratic funding my
the other motivating example suppose you
have different participants one Decay
and they submit contributions C1 to CK
uh to a project p uh and then the idea
here is for those of you who aren't
already familiar with it is it like
quadratic funding is used often to kind
of kind of give matching grants often
for public goods according to this
formula there uh and you might look like
a kind of strange formula if you're not
previously familiar with it but like
notice the square root in the first term
it basically has the effect that if
people submit a lot uh then their
contribution tapers out because like
square roots you know grow a lot and
then kind of level off uh so one
individual who submits like a tremendous
amount of contribution doesn't have too
big an effect even though like they're
the more they contribute the more of an
effect they have with better to get a
big matching Grant is to have lots of
people contribute because each person
contributing gives you an extra term in
this sum uh and then as an example
suppose on the left
um we have someone with you know an
Innovative ethereum project that wants a
public that's a public good and wants a
grant and on the right we have like a
fake proposal by someone who's just like
please give me a grant but I'm not going
to do anything uh and the person on the
left you know they get contributions
from a lot of different people uh and
you notice they get like a pretty good
total subsidy whereas the person on the
right is the only person that he's he is
the only person that contributes to his
proposal uh and you notice that his
total subsidy is zero uh and generally
if only one person contributes to a
given proposal the subsidy is zero uh
but this depends on having a good proof
of person to the scheme uh and you can
imagine if your proof of a person this
game was broken then the attacker can
like pretend to be and different people
each making a small contribution instead
of one person making a large
contribution uh and can basically steal
the subsidy pool
um so your security model is your proof
of person it's game needs to be secure
uh now what if I consider jury selection
in Claro's with a proof of person at
scheme where each person can only each
person has to be on proof of humanity or
president's game in order to be drawn
and you can only be drawn once uh then
the first draw and kind of the same as
before uh so maybe the the 45 dude gets
a draw uh and but then he can't be drawn
against everybody else's odds go up and
you necessarily draw three different
people and the overall odds of anyone
getting more than two spots is zero what
happens if I have an insecure proof of
person at scheme like take the
pessimistic case someone just completely
breaks proof of personhood and the
attacker has tons of profiles uh then
the first draw well nothing happens and
the attacker can be drawn more than once
because he has all these profiles and he
probably cut up his stake into different
profiles so the attacker is still in
this pool somebody else gets drawn and
now she can't be drawn again because she
only had one profile uh and so the
attacker's odds and everybody else's
odds go up a little bit uh and then on
the last Hospital the attacker has a
slightly higher chance than he did
before of getting more than half of the
votes but what's interesting here is
that it didn't like he broke completely
broke the proof of person in this game
but still doesn't completely break this
security it's not like he has an
overwhelming chance of getting all the
votes uh so the security model here is
that either your proof of person needs
to be secure or No One controls more
than x percent of the stake well what's
X it depends exactly on how many jury
spots there are in the distribution of
the other stickers if you have like a
handful of whales in your staking pool
then when you remove one of them the
attacker's odds go up a lot but if your
staking pool is really well distributed
it has lots of people with small Stakes
then X can approach 50 percent uh where
the attacker needs as much resources as
he did under the model without proof of
personhood so these like economic and
social layers layer together and don't
like only slightly kind of dilute the
security of one another and add multiple
layers of you know different kinds of
security without having to choose am I
going to like have a Social Security or
Economic Security so that's really nice
uh so now like an extension of this that
we're interested in and research doing
research on is what if you try to wait
people by sbts can you do something
that's kind of like this pulling in
Social information but with an even more
Rich way
uh so here people have different kinds
of sbts some people have a diploma from
there that blockchain course other
people got their pull-up from devcons
and people will want to contest want a
hackathon or something uh and then an
idea that's introduced in the
decentralized society paper
um so they consider various ways that
you can weight people's contributions to
quadratic funding uh and one of them in
particular is very general so that's
what I'm going to focus on and it's
called the offset match uh and the idea
here is that you assign correlation
scores between the participants you say
okay like participant I has so many slow
down tokens and she shares so many of
them with participant K so I'm going to
give this creates like a like a
correlation score out of that and then
I'm going to solve for these weights
Alpha
um that uh solve this like weird system
of equations so that looks kind of
abstract but I'll show some examples and
give some of my think how I think about
this uh so here the woman in the blue
shirt uh has two po has two spts and she
shares one of them with the great dude
and the green shirt so the correlations
are the half and if you solve for the
alphas you get these outfits uh and
notice that like the idea here is to
kind of give weights to anti-correlated
groups if like there's one group that
has an spt that's like really common and
they're all kind of aligned with each
other because as sort of evidenced by
having the same sbts they should get
less weight uh so here like tons of
people have the diploma so each one of
them kind of gets less weight uh whereas
the two people that have other co-ops
collectively they get more weight uh
however there's this like weird Quirk
where the women with the blue shirt got
no weight and the dude with the green
shark out like more weight uh so I'll
come back to that Quirk
um
but um so then how what's the kind of
philosophy behind this so you have these
like systems of equations you have this
like big Matrix of all the correlation
coefficients and then you're trying to
solve for this row Matrix of the alphas
uh and if you squint and you take like a
really extreme case and you're like okay
like all of the participants probably
fall into like a handful of clusters and
the Clusters are really highly
correlated with each other but not very
correlated with the other clusters uh
then you get a kind of Matrix equation
that looks like this so like in each of
the blocks with the ones those are
clusters of people that are very similar
between each other but then zeros show
that they're not very correlated with
the others and then if you solve this
Matrix equation it basically gives you
one equation per block uh and it says
each of the blocks gets roughly equal
weight uh and that weight is shared over
the people in the block so if you have
tons of people in your group in your
cluster as characterized by the syllable
tokens they have uh they don't get as
much weight as like a smaller block that
has like different experiences and
different cell bound tokens that each
one of them will get more weight
uh so this has some issues and the
people the authors of the centralized
Society paper already point out some of
these points and they you know they sort
of propose this as a place to start to
think about these issues uh so first of
all the alphas may not be exist and they
may not be unique if they do exist
moreover you can produce negative Alphas
uh there are ways you can sort of like
patch this you could say okay I got a
negative Alpha I'm just going to round
to zero that might mess a little bit
with your linear algebra philosophy uh
generally this handles how much weight
you give it to groups pretty well uh but
it doesn't necessarily distribute that
weight naturally to individuals uh so
like there's a tendency based on how the
linear algebra Works to give
participants with a subsuper set of spts
compared to somebody else zero weight
and this was that Quirk that happened
with the woman in the blue shirt she had
strictly more spts than somebody else
um
and um
so the motivation for the quad the
centralized Society authors was to
modify this formula for matching in
quadratic funding to put Alphas under
the square root so now in order to get a
big matching Grant you not only want to
have lots of contributions for lots of
different people you want those people
to have big outfits and how do they get
big Alphas well by representing groups
that like don't have so many people in
them and generally in order to get a big
matching Grant you're going to need a
lot of people from different groups uh
contributing to your project uh From
clarence's perspective so this is what
brings me to this uh you could imagine
re-weighting the stakes people have by
the alphas so you could use these these
like formulas over here for people's
drawing odds so we have this example
from before we get the same weights that
we had before and now like the woman
that has 40 stake she doesn't have very
she has very common sbts so that kind of
dilutes her influence a bit uh whereas
like other people with less stake but
uncommon sbts get get more of a chance
of being drawn and this is a potentially
natural thing to do uh at using spts at
all in Clarence to sort of like
interface with zero selection uh will it
allow us to have an explicit procedure
where in some courts in some decisions
in order to be drawn you need to have
expertise in relevant cases by having an
expertise that says that you were an
expert in that case so currently claros
has like a game theoretic mechanism to
discourage people from sticking where
they're not experts but this would allow
us to have like an explicit mechanism
that's an extra layer of security more
generally
by having people that come from
anti-correlated groups
as have different spts attest to
different experiences uh you get a tying
into like wisdom of the crowd's ideas
there's been a lot of research that
shows that groups of diverse problem
solvers or groups of different
experiences can often produce better
results than more monolithic groups uh
so potentially we could produce better
decisions by by having this social layer
in class uh but you have to ask okay
what's the security model here uh what
happens particularly if an attacker
breaks the distribution of an spt uh if
there are lots of spts being ordered by
lots of different entities you know
maybe some of them will be more secure
than others uh and then you have other
questions like are the participants
incentivized to keep the spts all in the
same address or split them up like you
you want people to sort of take their
identity well it's you want people to
have at least certain aspects of that
they're all in the same wallet rather
than having like different sbts on each
one like one spt per wallet or something
uh
um and um so imagine this for the first
point what happens if an spt is broken a
simple example so imagine that like the
attacker can break the distribution of
this like diploma he hacks into Coursera
or whatever and like can produce tons of
profiles with the diploma if you have a
group as evidenced by this that sort of
pulled out of this like clustering
algorithm anti-correlation mechanism
that has that's basically just
characterized by having the diploma uh
then the attacker can perfectly copy
them he can make an infinite number of
profiles or a large number of profiles
that exactly mimic people in the group
so he can steal all of their weight and
that's inevitable you know no matter
what weighting you use uh what's a more
interesting question is what happens if
the attacker well what happens if the
group is characterized by having ksbts
so I have a group of people like most of
whom have the same ksbts you know maybe
they share a few ksbts with other people
but mostly like they have those ksbts
and other groups don't uh and the
attacker just breaks one of the sbts the
diploma uh well then now you get this
like back to the block Matrix you have
something that looks like like this now
the correlation between the attacker and
the victims is like one over K because
he has one of their sbts and you can
solve for this and under the offset
match or the offset weighting uh the uh
the attacker still takes almost all the
weight because of this Quirk with people
of supersets and subsets uh where super
people with super sets of spts don't
don't get any weight uh so that's not
great but like you know you could
imagine adapting this somehow to try to
be resistant to this kind of attack
ultimately you would want something that
kind of looks like what we had with
proof of personhood being matched with
the economic staking where adding this
social layer kind of adds security and
mesh as well with the existing Economic
Security
uh so some there are other potential
waiting schemes one could imagine uh so
this idea is related to eigenvector
centrality uh it's some similar to the
idea used in the pagerank algorithm uh
so in the original version of
eigenvector centrality there's not this
like one over in the in the equation uh
and
conveniently simply enough you can kind
of turn it into a measure of
anti-correlation or anti-centrality just
by putting one over uh so this still
doesn't fully work it's a little more
resistant than the the offset match to
the the um this like question of what
happens if the attacker breaks one of
the the tokens uh so more research can
be done here uh I know Glenn wild at
least is also thinking about some of
these things he had some similar ideas
about econvector centrality that uses a
different formula uh so we can continue
to think about like what one could put
here that would be attack resistance in
the most robust way uh and just to
conclude so proof of personal protocols
can provide a natural base layer for
certain types of social recovery in some
cases distributions of svts uh ideas
developed around weight and quadratic
funding contributions by spts are also
relevant to other applications like
juror selection maybe you have some
airdrop and you want to give your
airdrop to a diverse member people
contribute to your community in a lot of
different ways who've interacted with
their protocol in different ways and
maybe that could be expressed by having
different spts uh
and but as we move from a purely
economic model to economic proof of
personhood proof of personal economic
plus spts this can have effects on our
security model and like the ideal thing
to have is to layer security so that as
we add these things like the system gets
more and more secure rather than having
to have to make sacrifices or we dilute
the economic security uh but there are
questions about various security models
what happens if an spt gets broken and
do users have an incentive disclosure
spts
so
um if there's time for questions I'd be
happy to take some questions thank you
very much William
we have a space for questions if someone
have
any questions