Editing Talk:DGF comparisons (section)

= Soulbound Tokens --  Ethereum =
A soulbound token is an Ethereum token specified in [https://eips.ethereum.org/EIPS/eip-5484 EIP 5484]. The basic new functionality Soul Bound (SB) tokens have is that the tokens are not allowed to leave the account they were first minted for. That is nearly (but not quite) meaningless. 

There are two uses I can imagine for the SB tokens: 
1. SB are more difficult to sell. 
2. SB are easier to slash. 

Those are crucial aspects of genuine reputation. But I believe it is more important to holistically design the REP system to give natural incentives that solve these problems. 

1. SB are more difficult to sell, ''but not much''. You can just sell the SB token account instead of selling tokens. So SB functionality would only be meaningful in the scenario where the DAO has a policy of awarding tokens to people who have already gotten tokens. In that case, new members are discouraged. If they don't do that, then the right approach is to use sockpuppet accounts for nearly every action which earns a soulbound token, then sell the accounts. That's the right move, because then your tokens would be more valuable.

Instead, we should assume every account is a sockpuppet, and not encourage or discourage new members, by rewarding or punishing people based on the age of their account.
Instead of forcing a member to bind their soul to a digital token, we should design DAOs in a way that people won't want to sell their REP tokens.
The approach of DGF is to make the REP tokens have clear power, measurable by tokenomics, so anyone who wishes to sell their tokens can use the [[Graceful Exit BOND market|Graceful Exit BOND market]]. Combined with the ability to slash tokens in a DAO, the market for REP would be a lemon market, i.e., depressed, so it's better to transfer the REP to BOND tokens if you want to cash out. Then people won't want to buy or sell REP, because the system is designed wisely.

DGF REP is more difficult to sell if you use the Graceful Exit BOND market and advertise a policy of slashing any tokens that are proven to have been sold. 

2. The second purpose of SB (being able to slash tokens) is that the account that accumulates SB tokens has them all linked together by their actions in the imagined DAO that uses SBs. But here's why that would be easy for any meaningful REP token to be slashed without the need for SB functionality: 
Take for example a [[Block producer DAO|block-producer DAO]] for running a blockchain. Whenever someone is chosen randomly to generate a block, it's because their REP was encumbered in an Availability SC. So the REP they are rewarded for doing the work is already tied to the previous REP they had. So all the REP that they ever generate from that point forward will be tied to one account in the same way as SB tokens. So the DAO can slash all that REP whenever the member is proven to have violated the DAO's standards.
Theoretically, a block producer could still have several accounts, but that's the same with or without SBs.[[User:Craig Calcaterra|Craig Calcaterra]] ([[User talk:Craig Calcaterra|talk]]) 11:45, 28 July 2023 (CDT)