Editing Reputation (section)

==== ''3. Decentralization'' ====
''Main page: [[Decentralization]]''

This mechanism is [[wikipedia:Monetary_inflation|inflationary]], in the economic sense, since new tokens are continually added to the DAO through the REP minting mechanism, whenever the DAO earns profit.<ref>It is a security risk for a DAO to print tokens in proportion to revenue instead of profit, since an entity which provides the service is then advantaged over members purely devoted to the DAO’s restricted domain of expertise.</ref> This naturally decentralizes power as the total quantity of REP tokens inflates<ref>The more advanced option of giving REP tokens a finite lifetime, as discussed in [[Reputation tokenomics|REP tokenomics]], is therefore a threat to decentralization whenever REP expires. Nevertheless, finite lifetimes encourage new membership, which can also have a decentralizing effect.</ref>, since any new work from any source will dilute the existing power base.