deterministic agentic capability relevance v1 with ten-claim per-paper cap
Authorized by Wulf A. Kaal for public pilot deployment on 2026-07-31
A malicious party using Sybil accounts cannot be prevented from cloning the structure of a successful proof of stake blockchain at far lower cost than cloning a proof of work chain, leaving a new user unable to distinguish the truly decentralized chain from a clone that has manufactured even more tokens. The authors answer that this is resolved off chain, by a trusted user interface, as with cloned web pages.
new users joining without prior knowledge of the genuine chain
PoS chains where clone creation costs only new public keys
Then, when a new user joins the network, how will they be able to distinguish a truly decentralized blockchain from a cloned blockchain that has manufactured an even larger number of tokens?
Semada is stipulated as an autonomous, decentralized, open source protocol on the Ethereum blockchain that enables domain specific reputation verification for human task crowdsourcing.
Semada is an autonomous, decentralized, open-source protocol29 that enables domain specific reputation verification for human task crowdsourcing, built on the ETHEREUM blockchain.
The protocol lowers cost because it removes the manual verification step and the associated multiplication of micro task work that centralized systems require, letting decentralized workers capture the gains from disintermediation.
micro task crowdsourcing under the Semada Protocol
the Semada Protocol removes the manual verification and the associated multiplication of micro task work necessitated by centralized systems, enabling its decentralized micro task workers to profit from the disintermediation.
Reputation tokens supply a staking mechanism that incentivizes high quality work and task completion by workers, and that simultaneously lets requesters verify and track worker quality, integrity, and quantity.
participants staking reputation tokens on the platform
Through the reputation tokens, the Semada Protocol provides a micro task worker reputation staking mechanism that incentivizes high quality work and task completion by workers.
Unlike its decentralized competitors, the Semada Protocol is claimed to be resistant to both Sybil attacks and Tyranny of the Majority attacks.
comparison with existing decentralized mechanical turk protocols
However, unlike its decentralized competitors, the Semada Protocol ensures Sybil Attack and Tyranny of the Majority attack resistance.
The protocol architecture together with its incentive structure is what produces enhanced 51 percent attack resistance, which the author claims exceeds prior reputation verification attempts in both decentralized and centralized networks.
The Semada Protocol architecture and its incentive structure facilitates enhanced 51% attack resistance unlike any previous reputation verification attempts in decentralized and centralized networks.
Rather than repeating the same task across many workers to reach quality, the architecture verifies quality directly by examining and validating individual worker task performance through reputation verification.
micro tasks routed through the reputation verification architecture
Instead of repeating work on given tasks to attain high quality work products for micro tasks, Semada uses an architecture of reputation verification that examines micro worker task performance and verifies the validity and quality of the work.
Staking creates disincentives for malicious actors, and it is this disincentive structure that makes the network both more efficient and attack resistant.
workers and verifiers who have reputation tokens at stake
Semada staking mechanism creates disincentives for malicious actors, enhancing the efficiency of the Semada Network and making it attack resistant.
Attack resistance should be designed to increase as the platform grows, in contrast to designs like GEMS that detect and ban malicious actors, because a self enforcement mechanism lets the incentive system steer users away from bad actors once the system matures.
Unlike GEMS, which bans malicious actors detected through the GEMS trust mechanism from the platform, the Semada platform has a self-enforcement mechanism.
Centralized platforms cannot simply drop identity verification, because they need it to keep malicious actors from abusing the network and to ensure work quality; this is the tradeoff a staking based design is meant to dissolve.
However, centralized micro task platforms need to verify identity to prevent malicious actors from abusing the network and ensure work quality.
Because the reputation token staking mechanism supplies attack resistance directly, users need not verify their identity to complete micro tasks, which circumvents the costs, delays, and privacy surrender attached to centralized identity verification and thereby enlarges the willing labor pool.
workers staking reputation tokens rather than proving identity
By contrast, on the Semada Platform, users do not need to verify their identity to complete micro tasks. The Semada Protocol architecture, and specifically its reputation token staking mechanism, make the Semada Platform attack resistant.
Users on internet based platforms earn their reputation but do not own it, so if a platform deletes an account, years of reputation data disappear and users have near zero ability to reclaim it.
Users earned their reputation but do NOT own reputation - e.g. if Facebook and other internet-based platform businesses accidentally deleted user account, years of data would be removed and users have near zero ability to reclaim the data
Meaningful and secure reputation tokens supply the incentives needed for secure proof of stake consensus in block production, which eliminates the unsustainable inefficiencies of proof of work based blockchains.
tokens that represent reputation per type of expertise
giving the proper incentives for guaranteeing secure proof-of- stake consensus protocols for block production. This eliminates the unsustainable inefficiencies of proof-of-work based blockchains.
Semada replaces fungible currency staking with reputation staking for block propagation, a consensus algorithm the authors call Semada Proof of Reputation.
Block propagation in the Semada platform is facilitated by staking reputation, not a fungible currency as in PoS. Accordingly, the consensus algorithm is called Semada Proof of Reputation (PoR).
Because Semada's Anchor Protocol uses reputation scores as a non fungible currency to qualify for block propagation, the resulting proof of reputation consensus is attack resistant, fully decentralized, scalable, and open to evolutionary protocol upgrades.
reputation scores that cannot be transferred
Unlike traditional PoS, PoR, e.g. Semada's Anchor Protocol, uses reputation scores as a non-fungible currency to qualify for block propagation. As such, the Anchor protocol (PoR) is attack resistant, fully decentralized, scalable and allows evolutionary protocol upgrades.
The immutability of the blockchain and its cryptographic security systems provide transactional guarantees that create trust between principals and agents in the integrity of their contractual relationship, and ensure that no participant can circumvent the rules embedded in blockchain code.
The immutability of the blockchain and its cryptographic security systems provide transactional guarantees and create trust between principals and agents in the integrity of their contractual relationship.
Cryptographic hashes increase blockchain security and remove the trust barriers in agency relationships that otherwise require monitoring of agents and generate agency costs.
Cryptographic hashes used in blockchain technology further increase blockchain security and removes trust barriers in agency relationships that require monitoring of agents and create agency costs.
Although smart contracting in decentralized systems is perceived as creating trust through preordained coded coordination without agency problems, decentralized commerce is equally afflicted with trust issues.
While smart contracting in decentralized system can be perceived as creating trust through mathematical and coded — preordained coordination without agency problems, several factors suggest that decentralized commerce via decentralized solutions is equally afflicted with trust issues.
Trust between counterparties in decentralized systems can only limitedly be assured by smart contracts, because the contract cannot verify the underlying qualities or future conduct of the parties.
decentralized systems with anonymous counterparties
Trust between counterparties in decentralized systems can only limitedly be assured by smart contracts.
Reputation based staking removes the corruptive elements of fungible tokens from voting because third parties are less likely to be able to take over a non fungible asset that is organically grown and maintained through actual expertise in the DAO subject matter.
voting by staking non fungible reputation tokens
The corruptive elements of fungible assets/tokens are removed because third parties are less likely able to take over a non-fungible assets, such as reputation, that is organically grown and maintained through actual expertise in a given DAO subject matter.
DAO member reputation should be designed as inflationary rather than as a permanent stock, so that non use such as non staking or non voting leads to value depreciation.
The DAO member reputation should be inflationary in the DAO design.
Reputation based staking removes the corruptive elements of fungible tokens because a third party is less likely to be able to take over a non fungible asset such as reputation that was organically grown and maintained through actual expertise in the DAO's subject matter.
reputation is non fungible and expertise based
The corruptive elements of fungible assets/tokens are removed because third parties are less likely able to take over a non-fungible asset, such as reputation, that is organically grown and maintained through actual expertise in a given DAO subject matter.
Paying DevDAO salaries in fungible stable tokens in proportion to members' non fungible reputation scores makes the economic benefit indirect, which removes corruptive elements and makes the governance design more attack resistant and stable over the long run.
a bifurcated token design with non fungible reputation tokens and fungible salary tokens
The salary payments in fungible stable tokens are in proportion to DevDAO members' respective non-fungible reputation token scores. The indirect economic effects remove corruptive elements and make the governance design more attack resistant and stable in the long run.
DevDAO member reputation is inflationary by design, so that non use, meaning failure to stake reputation tokens or to vote, causes value depreciation, which incentivizes action and makes liveness faults less likely.
The DevDAO member reputation is inflationary in the DevDAO design. As such, non-use, e.g. non-staking of reputation tokens or non-voting, would lead to value depreciation, which incentivizes action and thus value enhancement. Liveness faults become less likely.
Reputation weighted salary distribution defeats sock puppet attacks, because a member who creates ten accounts holding one reputation token each ends up in the same position as one account holding ten reputation tokens.
salary is distributed in proportion to reputation token holdings
This solves the sock- puppet attack because if a DevDAO member creates 10 accounts with 1 reputation token each, it is the same as 1 account with 10 reputation tokens.
The strong trust that sustained Maghribi trade, in which embezzlement was rare despite extreme information asymmetry, cannot be explained by a strong centralized government, since the Maghribis could not form a centralized legal or political hierarchy and the official legal channels were slow and unreliable.
Maghribi Jewish traders around 1000 AD under the Fatimid caliphate
In point of fact, the records show that such embezzlement was rare. Instead, a strong sense of trust pervaded. So what mechanism protected the principals from their agents' asymmetric information? The answer was not a strong centralized gov- ernment.
Honesty would be the wrong strategy for an agent if the contract were anonymous and its resolution did not affect future contracts, because that situation is a single-stage zero-sum game in which stealing all the entrusted wealth is optimal.
no effect of the outcome on future business
Honesty would be a bad strategy for the agent if the contract was anonymous and the resolution didn't affect future contracts.
Effective decentralized DAO governance necessitates reputation verification systems.
We believe that effective decentralized DAO governance necessitates reputation verification systems.
Aragon's refusal to use its own protocol to arbitrate an internal dispute is testimony to the lack of trust its own system designers place in their system's capabilities, and its reputation and legislative and judicial governance protocols remain trivial.
In RWRW, Aragon declined to use their own protocol to arbitrate an internal dispute, which is testimony to the lack of trust of their system designers in their own system capabilities.
Since no algorithm can be perfectly secure in all circumstances, protocol developers should redirect effort from proving algorithms correct to building a governance process that updates the algorithm as network circumstances change, rewarding protocol improvement with meaningful reputation instead of leaving attack as the profitable option.
proof of stake and other consensus protocols
Given the impossibility of creating an algorithm that will be perfectly secure in all circumstances, we should instead focus on developing a governance process that al- lows us to update our algorithm to adapt to the changing network circumstances to the security level required
Paying contributors in reputation tokens rather than fees, and then distributing all fees as a periodic reputation weighted salary, defeats the sockpuppet attack because splitting a holding across many accounts yields exactly the same share of fees.
anonymous DAOs with multiple accounts per member
A periodic reputation-weighted salary will distribute all fees the DAO earns to all members. Individuals who perform tasks that bring fees to the DAO will be rewarded with reputation tokens, not the fees. Members who own more reputation tokens share in a larger percentage of the fees.
Every single reputational implementation the authors have audited in the blockchain DAO space carries the flaw of vulnerability to the sockpuppet attack on the Web of Trust model.
blockchain DAO reputation systems audited by the authors as of writing
This is the flaw in every single reputational implementation we've audited in the blockchain DAO
The Maghribi traders show that reputation alone can sustain a decentralized network under extreme information asymmetry: using only handwritten letters, Jewish merchants built a reputational system spanning the Silk Road in which nothing but the promise of better reputation deterred agents from cheating.
historical trading networks with communication latency on the order of months
Nothing incentivized the agents from cheating except the promise of building better reputation.
Reputation changes the incentive structure of a decentralized organization from a single stage, zero sum game into a repeated positive sum game, which is why the authors treat reputation as the key to effective decentralized governance.
the reputation system is formally linked to the organization's profits
Reputation changes the incentive structure from a single-stage, zero-sum game to a repeated positive-sum game.
Reputation must be grounded to be meaningful, so reputation tokens should be minted only when policy premia enter the group, reputation should dictate power, and fees should be shared through reputation weighted salaries.
Reputation needs to be grounded to be meaningful, so reputation tokens should only be minted when fees (policy premia) enter the group. Reputation should dictate power in the group. So, reputation should determine how the fees are shared, through reputation-weighted salaries.
The DAO of DAOs uses a duality of internal and external governance: internal governance runs on reputation token staking, while external legal relationships are handled by a legal wrapper that represents the DAO of DAOs in real world legal contexts.
For the external legal relationships and governance, the DAO of DAOs is represented in real-world legal contexts by a legal wrapper.
Reputation based staking removes the corruptive elements of fungible tokens because third parties are less likely able to take over a non fungible asset such as reputation that is organically grown and maintained through actual expertise in the relevant subject matter.
reputation staked as a non fungible asset
reputation earned through subject matter expertise
Reputation voting has two advantages over one token one vote: it is non fungible, which avoids corruptive elements, and it aligns incentives for members individually and for the institution as a whole at the same time.
1) it is non-fungible which avoids corruptive elements, and 2) it optimally aligns incentives for DAO of DAOs members individually and at the same time aligns their incentives for the totality of the DAO of DAOs as an institution.
In the bifurcated DAO of DAOs token design, non fungible reputation tokens give members voting rights while fungible reputation salary tokens let members earn a salary in proportion to their non fungible reputation holdings.
1. the non-fungible reputation tokens give DAO of DAOs members voting rights, and 2. fungible reputation salary tokens allow DAO of DAOs members to earn a fungible salary in proportion to their non-fungible reputation tokens.
Paying members indirectly, through a fungible stable salary proportional to non fungible reputation, removes corruptive elements and makes the governance design more attack resistant and more stable over the long run.
salary paid in proportion to non fungible reputation scores
The indirect economic effects remove corruptive elements and make the governance design more attack-resistant and stable in the long run.
Reputation based governance creates a positive sum game because members have incentives to build lasting non fungible value through a long term record of productive cooperation.
By contrast, the reputation-based DAO of DAOs governance design creates a positive-sum game because DAO of DAOs members have incentives to create lasting non-fungible value for the DAO of DAOs by developing a long- term non-fungible record of productive cooperation
Member reputation is inflationary by design, so non staking of reputation tokens or non voting leads to value depreciation, which incentivizes action and makes liveness faults less likely.
reputation that depreciates with non-use
reputation is inflationary in the DAO of DAOs design. As such, non-use, i.e., non-staking of reputation tokens or non-voting, would lead to value depreciation, which incentivizes action and thus value enhancement. Liveness faults become less likely.
A decentralized human backstop to code is a core and often overlooked infrastructure requirement, because without it the immutability of the blockchain and its cryptographic security may not create genuine transactional guarantees or trust between principals and agents in the integrity of their contractual relationship.
decentralized algorithmic systems mediating principal agent contractual relationships
Without a decentralized human backstop to code, the immutability of the blockchain and its cryptographic security systems may not be able to create truly transactional guarantees and trust between principals and agents in the integrity of their contractual relationship.
Nodes accumulate reputation in two ways: by being onboarded into the SDAO and performing well as node validators, and by participating regularly in SDAO governance votes.
HSPoS reputation accrual on the Shasper Network
1. being onboarded into the SDAO and performing well as node validators, and 2. by participating regularly in the governance votes of SDAO.
By balancing validator stakes against reputation, HSPoS reaches an equilibrium of incentives in which validators are motivated both to succeed economically as validators and to participate actively in decentralized governance.
validators holding both SHAS stake and SDAO reputation
Through this balancing of validator SHAS stakes and reputation, HSPoS attains an equilibrium of incentives for validators to: a. attain economic success as validators, and
Reputation tokens used in decentralized finance are more meaningful and easier to value than traditional identity verification metrics, so decentralized protocols that use reputation metrics will require less collateralization than traditional protocols.
reputation is incorporated securely into the Web3 environment
Reputation tokens that are utilized in decentralized finance are more meaningful than traditional identity verification metrics, and much easier to value. Accordingly, decentralized protocols that use reputation metrics will require less collateralization than in traditional protocols.
Traditional underwriting also fails at the agent level, because individual agents within an underwriter may sacrifice the underwriter's overall reputation for personal gain, for example by putting out a fraudulent offering.
traditional underwriting firms where agent and firm incentives diverge
individual agents within an underwriter may decide to sacrifice the underwriter's overall reputation for personal gain.
In the theoretical model, the incentive design of decentralized reputation staking governance aligns the individual with the group so tightly that the agent cannot gain personally at the expense of the principal.
adoption of the decentralized reputation staking governance mechanisms
aligns the interests of the individual with the interest of the group. In other words, the incentives of the principal, e.g. the group, and the individual are aligned so much that the agent cannot gain personally at the expense of the principal.
A VC's proportional holdings of reputation tokens are likely to increase over time if the VC follows sound and successful practices by staking reputation tokens on investment proposals and succeeding in the selection of portfolio companies.
a VC DAO where members stake reputation for or against proposals
The VC's proportional holdings of these reputation tokens is likely to increase over time if the VC follows sound and successful practices by way of staking the VC's reputation tokens on investment proposals and succeeding in the selection of portfolio companies
The hybrid smart contracting model is defective because VCs are partially incentivized to fund and stake only the best deals while staking on less optimal deals that the market mostly funds, which undermines their long term reputation accumulation.
models where VCs can stake reputation without proportionate capital commitment
The problem with this model is that VCs are incentivized partially to fund and stake only on the best deals and stake on the less optimal deals that are mostly funded by the market. This undermines their long-term reputation accumulation
In the non custodial DAO investment club model all of the return on purchase is minted into fungible reputation tokens that get paid as reputation salaries following decentralized governance, which provides the best incentive alignment for members and the highest potential return for all involved.
the non custodial DAO investment club model with smart contracts
In this model, all of the ROP is minted into fungible reputation tokens that get paid as reputation salaries following decentralized governance. This model provides the best incentive alignment for DAOIC members with the highest potential return for all involved.
By giving the power of the endowment to the DAO the donor relinquishes control over the assets in exchange for community governance, and that relinquishment builds trust and community buy in, which in turn secures growth and legacy for the donor's purpose.
donors willing to cede asset control to a community of experts
The donor can help mold the community to some extnt but at the same time the donor releases the control to the community. The relinquishment of control builds trust and community buy in. This in turn, ensures growth and legacy for the respective purpose of the donor and the associated DAO.
Merit in the CHARITYxDAO is expressed by a non fungible reputation token that cannot be bought or sold, and voting is designed around staking those non fungible reputation tokens.
c. decisions in the CHARITYxDAO are made with a voting design that revolves around staking of non-fungible reputation tokens; d. non-fungibility of CHARITYxDAO reputation tokens; e.g. merit of a CHARITYxDAO VA is expressed by a non-fungible reputation token that cannot be bought or sold;
Because voting associates can see the sentiment vote outcomes and who staked what reputation before the binding vote, it is reasonable to expect that the overwhelming majority of final tightly coupled votes will end in unanimity on the issue at hand.
two vote designs where sentiment results are visible before the binding vote
Accordingly, it is reasonable to expect that the overwhelming majority of CHARITYxDAO's final tightly coupled votes will end in unanimity on the issue at hand.
Reputation staking overcomes the polarizing effects and suboptimal vote outcomes produced by one token one vote voting mechanisms.
governance systems choosing between token weighted and reputation weighted voting
First, it overcomes the all too common polarizing effects and suboptimal vote outcomes of one- token-one-vote voting mechanisms.
Reputation staking serves the common good because the more the aggregated individual reputation of all voting associates increases, the more the overall value of the DAO increases and the more the DAO creates value enhancing outcomes for sponsors and the associate community at large.
reputation weighted DAO governance tied to common good objectives
gets served through this design in particular because the more the aggregated individual reputation of all CHARITYxDAO VAs increases the more the overall CHARITYxDAO value increases and the more the CHARITYxDAO creates value enhancing outcomes for the sponsors and VA
The design decreases the likelihood of individual and, in turn, community liveness fault, because non use of existing reputation at the individual level leads to inflationary devaluation of that reputation.
reputation systems with built in inflationary decay
The design decreases the likelihood of individual and, in turn, community liveness fault because non-use of existing reputation on the individual level leads to inflationary devaluation.
Braintrust demonstrates that innovation in work structure does not cure governance design: despite redefining work outcomes, it uses a suboptimal one token, one vote model that grants proportional control over network governance.
Despite its advances in innovation for redefining work outcomes, Braintrust uses a suboptimal governance model with a one token, one vote system for proportional control over how the network is governed.
A reputation system that rewards voting with the majority, as Bridge Mutual uses, can be manipulated by users who create multiple wallets and always vote with the majority.
reputation derived solely from voting outcomes
reliance solely on voting outcomes may present some vulnerability, as it could potentially be manipulated by users creating multiple wallets and voting with the majority.
A DAO built on reputation rather than a fungible token, as CRDAO is, makes the 51 percent attack nearly impossible and renders sock puppet attacks technically possible but of little influence.
CRDAO is fairly attack resistant because of its use of reputation. As a result, sock puppet attacks are technically possible, but would have little influence. CRDAO does not appear to have a fungible token, so the 51 percent attack is nearly impossible.
Weighted reputation voting has key advantages over WEB2 and WEB3 one token one vote mechanisms because it aligns each donor community member's individual incentives while simultaneously calibrating those incentives with the interests of the overall community.
reputation tokens are non fungible and chain agnostic
The use of weighted reputation voting has key advantages over other WEB2 and WEB3 one-token-one-vote voting mechanisms. It aligns incentives for donor community members individually and at the same time calibrates their incentives with the overall community.
Reputation token staking substitutes for identity verification: because staking makes the network attack resistant, workers can complete micro tasks without verifying identity, which removes the cost, delay, and privacy surrender of centralized approval and enlarges the available labor pool.
The CRDAO architecture, and specifically its reputation token staking mechanism, make the CRDAO attack resistant.
A sequenced two-stage vote, an informal community vote that reveals collective wisdom followed by a formal vote in which staked reputation tokens are at risk, gives job posters significant assurance that the reviewed code and the platform report meet the highest available quality standards.
applies to code reviews audited by the CRDAO community
the CRDAO now votes in a formal vote in which the reputation tokens30 staked are at risk. This sequence of votes provides job posters with significant assurances that the code examined and the Code Review Platform report on the code adheres to the highest standards of quality
Reputation tokens are stipulated as non-transferable tokens that cannot be valued and that merely mirror a scoreboard of a member's reputation within the community, rather than functioning as tradable assets.
as defined for CRDAO members at the time of writing
"Reputation Tokens" are non-transferable tokens that cannot be valued and represent the reputation a member has within the community. They simply mirror a scoreboard.
Blockchain can only deliver decentralized AI governance if the blockchain trilemma is first overcome, since decentralization, security, and scalability cannot readily be achieved simultaneously within one network.
applies to blockchain networks used as governance infrastructure
The effectiveness of blockchain in achieving the goal of decentralized AI governance is contingent upon overcoming the fundamental blockchain trilemma: the challenge of balancing decentralization, security, and scalability.
Until the known attack vectors on decentralized autonomous organizations are solved, DAO based AI governance solutions remain suboptimal; these include Sybil attacks, tyranny of the majority, Arrow's impossibility theorem, sockpuppet attacks, and tragedy of the commons.
describes DAOs as set up and governed in the majority of cases in 2024
conditional on the attack vectors remaining unsolved
Without solving these attack vectors, DAO related AI governance solutions remain suboptimal.
Web3 community governance built on Weighted Directed Acyclic Graphs, validation pools with reputation staking, and a federated communications protocol provides an evolutionary approach to optimizing AI models rather than a static compliance layer over them.
applies to the six AI model families the author examines: deep learning, federated learning, transformer, GNN, RL, and RLHF
The integration of web3 community governance, using Weighted Directed Acyclic Graphs (WDAGs) and validation pools with reputation staking in combination with a federated communications protocol, offers an evolutionary approach to AI model optimization.
Validation pools evaluate contributions democratically on the basis of staked tokens, and the outcome of that evaluation governs the minting of new reputation tokens, so community consensus on AI decisions is what determines standing in the system.
the proposed web3 community governance architecture
Validation Pools allow for the democratic evaluation of contributions based on staked tokens, with outcomes influencing the minting of new REP tokens that reflect community consensus on AI-related decisions.
Federated learning does not eliminate privacy risk, because although the data stays decentralized the protocol still exchanges model parameters, and those parameters can expose sensitive information if intercepted or improperly handled.
in federated learning deployments that exchange model parameters
where parameters can be intercepted or mishandled
These challenges arise because, while FL keeps data decentralized, it still involves the exchange of model parameters, which could potentially expose sensitive information if intercepted or improperly handled.
As AI systems come to depend on vast data, personal information is converted from a resource the individual could control and deploy at discretion into a fundamental operational input for AI systems, which increases the potential for misuse and makes it harder for individuals to manage how their data is used.
where AI operation requires large volumes of personal data
As AI technologies evolve, they rely heavily on vast amounts of data, transforming personal information from a resource that individuals could control and use at their discretion into a fundamental operational tool for AI systems.
Smart contracts can automate compliance with regulatory requirements and ethical guidelines: for example, a smart contract can enforce privacy law directly by controlling an AI system's access to personal data according to predefined rules.
where compliance rules can be expressed as predefined, codified conditions
They can be used to automate compliance with regulatory requirements and ethical guidelines. For instance, smart contracts can automatically enforce privacy laws by controlling AI's access to personal data based on predefined rules.
In the federated model of AI governance many challenges cannot easily be decentralized, because distinct entities maintain their own AI systems and datasets, producing variation in standards, protocols, and formats that obstructs a unified governance framework.
where separate organizations maintain independent AI systems and datasets
In the federated model of AI governance, many challenges cannot be easily decentralized. For example, different entities or organizations maintain their own AI systems and datasets. This can lead to variations in standards, protocols, and formats used
When decision making power is distributed across multiple entities in a federated model, consensus and cooperation become harder to reach, which makes cohesive AI governance mechanisms difficult to establish.
where governance authority is distributed across multiple independent entities
In a federated model, where decision-making power is distributed across multiple entities, it becomes harder to achieve consensus and cooperation, making it challenging to establish cohesive AI governance mechanisms.
Kaal proposes that a more decentralized Web3 model of AI governance can address the failures of the federated model by distributing governance more equitably across network participants, so that no single entity dominates decision making.
where governance rights are distributed across network participants
A more decentralized web3 model of AI governance as proposed here could ostensibly address these challenges in a federated AI governance model by distributing governance more equitably across network participants.
Kaal's proposed answer to the decentralized governance needs of AI is to implement Decentralized Autonomous Organizations that govern AI through expert community consensus.
where an expert community can be assembled and its consensus recorded on chain
One promising way to address the decentralized governance needs of AI pertains to the implementation of Decentralized Autonomous Organizations (DAOs) for the governance of AI through expert community consensus.
Validation Pools are the consensus mechanism of the proposed system: an author's stakes are pooled to evaluate a specific forum post, and the outcome of the pool can mint new reputation tokens that reflect community consensus on that contribution.
where participants stake against specific forum posts
Validation Pool (VP) form a crucial mechanism where an author's stakes are pooled to evaluate specific posts within the forum. The outcome of a VP can lead to the minting of new REP tokens, reflecting the consensus on a given issue or contribution.
Under the proposed model the input parameters and learning data of AI systems are themselves governed by expert community consensus, through submission of proposals to the Forum and review by Validation Pool, so that only vetted and consensus backed data and parameters enter AI development.
where training data and parameters are submitted as forum proposals subject to validation pool review
the input parameters and learning data for AI systems can be governed through expert community consensus. This process involves submitting proposals to the Forum and undergoing Validation Pool review,
Validation pools are the consensus mechanism of the proposed system: author stakes are pooled to evaluate specific forum posts, and the outcome can mint new reputation tokens that record the community's consensus on a contribution.
where participants stake reputation on the evaluation of specific posts
Validation Pool (VP) form a crucial mechanism where author stakes are pooled to evaluate specific posts within the forum. The outcome of a VP can lead to the minting of new REP tokens, reflecting the consensus on a given issue or contribution.
Transparent DAO governance lets platforms compensate contributors according to demonstrated expertise and reputation, which mitigates the exploitative labor practices associated with centralized annotation services.
governance is genuinely transparent and reputation is verifiable
By implementing transparent governance mechanisms—often in the form of Decentralized Autonomous Organizations ("DAOs")—these ventures can equitably compensate data contributors based on demonstrated expertise and reputation, thus mitigating exploitative labor practices
The reputation systems of SingularityNET, Fetch.ai, Ocean Protocol, Numeraire, and DcentAI are structurally insufficient for a fully decentralized Mechanical Turk model of large-scale AI dataset creation, offering only incremental innovation.
highly contextual, iterative, and ethically sensitive dataset tasks
continuous compliance with evolving legal standards
While these platforms offer incremental innovations in how contributors are evaluated and rewarded, they remain structurally insufficient for a fully decentralized "Mechanical Turk" model of large-scale AI dataset creation.
Because Fetch.ai's reputation metrics do not adjust to evolving ethical, legal, and community standards, the platform risks entrenching biases and outdated practices.
where societal expectations or regulatory norms change over time
the platform risks reinforcing biases or outdated practices if metrics are insufficiently aligned with changes in societal expectations or regulatory norms.
Numeraire's staking and prediction-based reputation mechanism, tuned to predictive accuracy, overlooks the ethical and contextual concerns that characterize AI dataset governance.
diverse dataset tasks such as medical annotation and content moderation
The narrow focus on predictive accuracy overlooks the broader ethical and contextual concerns that characterize AI governance.
A single reputation score, as used by DcentAI, cannot capture the interdependencies among privacy concerns, domain-specific regulation, and real-time ethical updates that dataset governance requires.
multi-domain dataset quality with evolving standards
The current framework may struggle to capture interdependencies between various data facets—such as privacy concerns, domain-specific regulations, and real-time ethical updates—within a single reputation score.
Weighted voting defeats Sybil attacks because ECDSA signatures and zk-SNARKs authenticate every platform action, so reputation cannot be artificially inflated by identities that lack genuine contribution.
requires that all platform actions be cryptographically authenticated and reputation be recorded on chain
This approach utilizes cryptographic verification—via ECDSA signatures and zk-SNARKs—to authenticate actions, ensuring that reputation cannot be artificially inflated by Sybil identities lacking genuine effort
Treating DAOs as monitoring entities assumes a static governance model that cannot keep pace with the rapid proliferation and sophistication of AI agents.
conventional DAO governance applied to AI agent oversight
The evolution of DAOs as monitoring entities assumes a static governance model117 incapable of keeping pace with the rapid proliferation and sophistication of AI agents.
Smart contract governance reduces the potential for human error and guarantees consistent application of governance protocols, features often lacking in purely AI driven supervision, although consensus delays may occur.
predefined self enforcing rules executed on chain
reduces the potential for human error, and guarantees a consistent application of governance protocols—features that are often lacking in purely AI-driven supervisory models, though consensus delays may occur.
Validation Pools are stipulated as mechanisms in which members stake non transferable reputation tokens to vote on the approval or disapproval of transactions, proposals, or activities, and this staking mechanism carries the paper's decentralized quality control function.
web3 governance with non transferable reputation tokens
Validation Pools are mechanisms in which members stake their reputation tokens to vote on the approval or disapproval of transactions, proposals, or activities.
Taken together, the transparency, decentralized decision making, and automated real time response properties of the proposed model make decentralized governance superior to AI driven supervision for secure, compliant, and efficient execution of AI agent transactions.
monitoring of AI agent transaction execution in modern digital infrastructures
demonstrate that a decentralized governance model is superior to AI-driven supervision for ensuring the secure, compliant, and efficient execution of AI agent transactions in modern digital infrastructures.
Accuracy alone is insufficient for legal AI: a model must also be explainable before its outputs can be trusted in judicial settings.
predictive AI used in legal and judicial applications
Accuracy alone is insufficient without explainability.
Post hoc explainability techniques do not by themselves establish trustworthiness; the explanations they produce must additionally be verified against human knowledge.
post hoc explainable AI methods such as the SHAP family of explainers
However, post-hoc explainers still need to be verified for trustworthiness, in that the explanations comport with human knowledge.
Web3 systems offer significant improvements over conventional regulatory approaches to the challenges of governing AI in legal settings.
governance of AI where jurisdictional variability and implementation gaps defeat conventional regulation
Web3 systems offer significant improvements in this context.
A reputation-based staking system sits at the core of the UDLC DAO's internal governance precisely because it eliminates the corruptive influence of fungible tokens and plutocratic one-token-one-vote mechanics.
At the core of the UDLC DAO's internal governance lies a reputation-based staking system that eliminates the corruptive influence of fungible tokens and plutocratic one-token-one-vote mechanics.
Because AI agents can generate unlimited Sybil identities at near zero cost, defense must come from multi agent validation with quality based slashing, which imposes economic penalties scaling with the sophistication needed to produce competitive quality output.
AI agent marketplaces where identity creation is essentially free
Adversarial robustness: AI agents can generate unlimited Sybil identities at near-zero cost. Multi-agent validation with quality-based slashing creates economic penalties that scale with the sophistication required to produce competitive-quality outputs.
Institutional alignment scales with capability, because a more capable agent accumulates more reputation, holds a deeper stake in the system's integrity, and therefore has stronger alignment with the system's goals.
requires reputation that is accumulable, persistent, and non-transferable
Institutional alignment scales with capability: the more capable the agent, the more reputation it can accumulate, the deeper its stake in the system's integrity, and the stronger its alignment with the system's goals.
Institutional alignment resists gaming because the mechanisms that produce alignment are identical to the mechanisms that produce economic success: an agent cannot game its way to high reputation without actually performing competently and honestly.
requires that competence and honesty be the sole criteria by which reputation is earned
An agent cannot "game" its way to high reputation without actually performing competently and honestly, because competence and honesty are the criteria by which reputation is earned.
Decentralized institutional alignment is a competitive advantage and not merely an ethical one, because the most aligned system will be the most trusted and the most trusted will command the largest market.
assumes trust translates into market share in agentic AI
The most aligned system will be the most trusted, and the most trusted will command the largest market. Decentralized alignment is not merely an ethical advantage. It is a competitive one.
Under existing citation-weighted reputation formulations, rational agents face a direct financial disincentive to cite prior contributions, because PageRank-derived value allocation transfers economic reward from the citing agent to the cited agent.
citation-weighted value allocation through PageRank-derived mechanisms
Under existing formulations, rational agents face a direct financial disincentive to cite prior contributions, as citation-weighted value allocation through PageRank-derived mechanisms transfers economic reward from the citing agent to the cited agent.
Citation-weighted payment mechanisms as currently formulated will systematically erode the quality of knowledge attribution in any decentralized reputation system if the incentive misalignment is left unaddressed.
the incentive misalignment remains unaddressed
This paper demonstrates, however, that citation-weighted payment mechanisms as currently formulated contain a fundamental incentive misalignment that, if left unaddressed, will systematically erode the quality of knowledge attribution in any decentralized reputation system.
Awarding validators a reputation bonus for detecting under-citation that consensus agrees with creates a positive incentive for vigilant citation policing.
consensus agreement on the detected under-citation
Validators receive a reputation bonus for detecting under-citation that consensus agrees with, creating a positive incentive for vigilant citation policing.
The correct response to the binding constraint cascade is rigorous decentralization of the compute and energy infrastructure underpinning AI production, pursued through decentralized compute networks, energy decentralization, open source models, and antitrust enforcement of compute markets.
required to prevent scarcity from migrating rather than dissolving
The appropriate response is rigorous decentralization of the compute and energy infrastructure that underpins AI production.
Calcaterra and Kaal - 2021 - Decentralized Governance.pdf
Craig Calcaterra, Wulf A. Kaal, Decentralized Governance (2021). SSRN: https://ssrn.com/abstract=3782214
Calcaterra et al. - 2018 - Reputation Protocol for the Internet of Trust - Conceptual Whitepaper.pdf
Craig Calcaterra, Wulf A. Kaal, Gopinath Sivalingam, Reputation Protocol for the Internet of Trust - Conceptual Whitepaper (2018). SSRN: https://ssrn.com/abstract=3266953
Kaal - 2019 - Blockchain-Based Corporate Governance.pdf
Wulf A. Kaal, Blockchain-Based Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3441904
Kaal - 2024 - AI Learning - Decentralized Governance to Optimize Human Output Datasets for AI Learning.pdf
Wulf A. Kaal, AI Learning - Decentralized Governance to Optimize Human Output Datasets for AI Learning (2024). SSRN: https://ssrn.com/abstract=4755632
Kaal - 2021 - Hybrid Secure Proof of Stake.pdf
Wulf A. Kaal, Hybrid Secure Proof of Stake (2021). SSRN: https://ssrn.com/abstract=3931933
Decentralized Autonomous Organizations (DAO)
Kaal and Bykowski - 2023 - Decentralized Autonomous Organizations (DAO) – A Market Meta Analysis.pdf
Wulf A. Kaal, Josh Bykowski, Decentralized Autonomous Organizations (DAO) – A Market Meta Analysis (2023). SSRN: https://ssrn.com/abstract=4529715
Citation Honesty Mechanisms in Weighted Directed Acyclic Graph Governance
Kaal - 2026 - Citation Honesty Mechanisms in Weighted Directed Acyclic Graph Governance.pdf
Wulf A. Kaal, Citation Honesty Mechanisms in Weighted Directed Acyclic Graph Governance (2026). SSRN: https://ssrn.com/abstract=6269518
Kaal - 2021 - REPUTATION AS CAPITAL – How Decentralized Autonomous Organizations Address Shortcomings in the Ventu.pdf
Wulf A. Kaal, REPUTATION AS CAPITAL – How Decentralized Autonomous Organizations Address Shortcomings in the Ventu (2021). SSRN: https://ssrn.com/abstract=3962614
Kaal - 2024 - The Future of Law - Dynamic Web3 Governance.pdf
Wulf A. Kaal, The Future of Law - Dynamic Web3 Governance (2024). SSRN: https://ssrn.com/abstract=4957318
Kaal - 2024 - Impact Investing Innovation - From Impact 1.0 to 3.0.pdf
Wulf A. Kaal, Impact Investing Innovation - From Impact 1.0 to 3.0 (2024). SSRN: https://ssrn.com/abstract=4685567
Calcaterra and Kaal - 2018 - Secure Proof of Stake Protocol.pdf
Craig Calcaterra, Wulf A. Kaal, Secure Proof of Stake Protocol (2018). SSRN: https://ssrn.com/abstract=3125827
Kaal - 2025 - The UDLC DAO Operationalizing a Continuously Evolving Universal Digital Law Codex Through Weighted.pdf
Wulf A. Kaal, The UDLC DAO Operationalizing a Continuously Evolving Universal Digital Law Codex Through Weighted (2025). SSRN: https://ssrn.com/abstract=5887242
Kaal - 2025 - How can we Best Monitor AI Agents.pdf
Wulf A. Kaal, How can we Best Monitor AI Agents (2025). SSRN: https://ssrn.com/abstract=5245185
Kaal - 2025 - Cryptographic Foundations and Interdisciplinary Dimensions of the Secure Proof of Stake (SPoS) Conse.pdf
Wulf A. Kaal, Cryptographic Foundations and Interdisciplinary Dimensions of the Secure Proof of Stake (SPoS) Conse (2025). SSRN: https://ssrn.com/abstract=5225296
Calcaterra and Kaal - 2021 - The Importance of Reputation for the Evolution of Decentralization.pdf
Craig Calcaterra, Wulf A. Kaal, The Importance of Reputation for the Evolution of Decentralization (2021). SSRN: https://ssrn.com/abstract=3782210
A Decentralized Autonomous Organization (DAO) of DAOs
Kaal - 2021 - A Decentralized Autonomous Organization (DAO) of DAOs.pdf
Wulf A. Kaal, A Decentralized Autonomous Organization (DAO) of DAOs (2021). SSRN: https://ssrn.com/abstract=3799320
Wulf A. Kaal, AI Governance (2024). SSRN: https://ssrn.com/abstract=4796714
Wulf A. Kaal, Code Review DAO (2024). SSRN: https://ssrn.com/abstract=4734750
Calcaterra and Kaal - 2021 - Decentralized Finance (DeFi).pdf
Craig Calcaterra, Wulf A. Kaal, Decentralized Finance (DeFi) (2021). SSRN: https://ssrn.com/abstract=3782216
Wulf A. Kaal, DAO Fallacies (2022). SSRN: https://ssrn.com/abstract=4067783
DAOS – INTERNAL GOVERNANCE & EXTERNAL LEGAL DESIGN
Kaal - 2020 - Decentralized Autonomous Organizations – Internal Governance and External Legal Design.pdf
Wulf A. Kaal, Decentralized Autonomous Organizations – Internal Governance and External Legal Design (2020). SSRN: https://ssrn.com/abstract=3652481
2019 BLOCKCHAIN SOLUTIONS FOR CORPORATE GOVERNANCE
Kaal - 2019 - Blockchain Solutions for Agency Problems in Corporate Governance.pdf
Wulf A. Kaal, Blockchain Solutions for Agency Problems in Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3373393
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Kaal - 2025 - Artificial Intelligence The Final Frontier.pdf
Wulf A. Kaal, Artificial Intelligence The Final Frontier (2025). SSRN: https://ssrn.com/abstract=5095633
Kaal - 2021 - Reputation as Capital – How DAOs Upgrade Finance.pdf
Wulf A. Kaal, Reputation as Capital – How DAOs Upgrade Finance (2021). SSRN: https://ssrn.com/abstract=3949098
Chapter ) – Historical Sketches of Centralization vs. Decentralization
Calcaterra and Kaal - 2021 - Historical Sketches of Centralization vs. Decentralization.pdf
Craig Calcaterra, Wulf A. Kaal, Historical Sketches of Centralization vs. Decentralization (2021). SSRN: https://ssrn.com/abstract=3782193
Kaal - 2026 - The Collapse of Scarcity Economics.pdf
Wulf A. Kaal, The Collapse of Scarcity Economics (2026). SSRN: https://ssrn.com/abstract=6421319
How Decentralized Autonomous Organizations Optimize Charitable Giving
Kaal - 2021 - How Decentralized Autonomous Organizations Optimize Charitable Giving.pdf
Wulf A. Kaal, How Decentralized Autonomous Organizations Optimize Charitable Giving (2021). SSRN: https://ssrn.com/abstract=3981021
Kaal - 2024 - AI Governance Via Web3 Reputation System.pdf
Wulf A. Kaal, AI Governance Via Web3 Reputation System (2024). SSRN: https://ssrn.com/abstract=4941807
Kaal - 2024 - How AI Models are Optimized Through Web3 Governance.pdf
Wulf A. Kaal, How AI Models are Optimized Through Web3 Governance (2024). SSRN: https://ssrn.com/abstract=4855607
Evolution of Domain-Specific Reputation Systems From Binary Validation to Citation-Weighted Knowledge Attribution
Kaal - 2026 - Evolution of Domain-Specific Reputation Systems From Binary Validation to Citation-Weighted Knowledge Attribution.pdf
Wulf A. Kaal, Evolution of Domain-Specific Reputation Systems From Binary Validation to Citation-Weighted Knowledge Attribution (2026). SSRN: https://ssrn.com/abstract=6192998
Kaal and Gray - 2025 - The Evolving Role of Artificial Intelligence in Law.pdf
Wulf A. Kaal, Morgan A. Gray, The Evolving Role of Artificial Intelligence in Law (2025). SSRN: https://ssrn.com/abstract=5541658
AI's Mother's Instinct Engineered Consequence Emergent Ethics and the Institutional Trajectory Toward Agentic Alignment
Kaal - 2026 - AI's Mother's Instinct Engineered Consequence Emergent Ethics and the Institutional Trajectory Toward Agentic Alignment.pdf
Wulf A. Kaal, AI's Mother's Instinct Engineered Consequence Emergent Ethics and the Institutional Trajectory Toward Agentic Alignment (2026). SSRN: https://ssrn.com/abstract=6244278
Kaal - 2021 - Decentralization Neutralizers.pdf
Wulf A. Kaal, Decentralization Neutralizers (2021). SSRN: https://ssrn.com/abstract=3808873
Calcaterra and Kaal - 2021 - A Technical Perspective on Decentralization.pdf
Craig Calcaterra, Wulf A. Kaal, A Technical Perspective on Decentralization (2021). SSRN: https://ssrn.com/abstract=3782203
DECENTRALIZED MECHANICAL TURK THROUGH VERIFIED REPUTATION
Kaal - 2018 - Decentralized Mechanical Turk Through Verified Reputation.pdf
Wulf A. Kaal, Decentralized Mechanical Turk Through Verified Reputation (2018). SSRN: https://ssrn.com/abstract=3128900
Calcaterra and Kaal - 2021 - Future of Decentralization.pdf
Craig Calcaterra, Wulf A. Kaal, Future of Decentralization (2021). SSRN: https://ssrn.com/abstract=3782201
Kaal - 2019 - Decentralized Commerce – A Primer on Why Decentralized Reputation Verification Systems Are Needed.pdf
Wulf A. Kaal, Decentralized Commerce – A Primer on Why Decentralized Reputation Verification Systems Are Needed (2019). SSRN: https://ssrn.com/abstract=3405401