Smart Contract Summit 2021: Identity and Reputation Panel

SCRF has been invited to host an independent research track as part of the 2021 Smart Contract Summit. We’ve chosen to present five panel discussions that touch on some of the most timely issues facing the blockchain space: “Identity and Reputation”, “Governance Theory”, “Governance Implementation”, “Privacy and SNARKS”, and “CBDCs and Blockchain”.

In this series of threads, we will be providing some deeper insight into the panel topics, the participants, and where interested viewers can find their most relevant works.

What is SCRF

The Smart Contract Research Forum (SCRF) is where academics, researchers, and industry leaders from all over the world come together to discuss research, solicit thoughtful peer review, and find new projects on which to collaborate. You can find additional information about our programs, grants, and initiatives in our repo; or feel free to join us in our chat.

About the Identity and Reputation Panel

What role can distributed ledger technologies (DLT) play in reducing wealth inequality and building stronger communities?

This panel explores how the transparency inherent to Distributed Ledger Technologies can be used to increase community trust and help turn those relationships into robust local economies. Both the projects discussed by our panelists (Defterhȃne Protocol and ZUZ) allow users to monetize their reputations. Defterhȃne, through check-based credit creation and transfer, and ZUZ, by allowing local businesses to issue localcoins that backed by their own goods and services.

We explore the emergent consequences of allowing users to mint and trade individually-backed tokens, the tensions between transparency and privacy, how systems can increase trust and economic value in a community, how they can lead to increasingly sustainable economies, and finally, how to position this kind of technology so it can be used by everyday users from around the globe.

Full Video

Panelist Bios and Relevant Works

Cemil Şinasi Türün

Cemil is an entrepreneur, artist-engineer, part-time academician. He has more than twenty years of experience in digital currencies and gaming. He holds an MFA in Computer Graphics from Bilkent University and a BA in Electrical and Electronics Engineering from Boğaziçi University. Within an early-stage start-up his team developed a 3D-virtual world and a real-world compatible currency with venture capital from Silicon Valley between 2008 and 2014. Since 2018 he has been the co-founder of Defterhȃne, a blockchain start-up inspired by a 40-year-old decentralized credit creation instrument used in Turkey. He is also a university lecturer at Istanbul’s prestigious Boğaziçi University, where he teaches a course on blockchains.

Some of Cemil’s work:

Relevant links for Cemil:

Seth Copen Goldstein

Seth has been a faculty member of the Department of Computer Science at Carnegie Mellon University since 1997. He received his Ph.D. in Computer Science at the University of California at Berkeley and B.S. from Princeton University. Before attending UC Berkeley, Seth was CEO and founder of Complete Computer Corporation which developed and marketed object-oriented programming tools.

Seth’s main research agenda focuses broadly on ensembles: large collections of interacting agents. In the area of reconfigurable computing, he investigated how to compile high-level programming languages directly into configurations that could harness the large ensemble of gates for computing. He then began investigating how ensembles of molecules could be used to create circuits; investigating how to design, manufacture, and use molecular-scale devices for computing. This led to research into programmable matter; an ensemble of computing elements that can be programmed to work together to produce changes in the physical properties of the ensemble.

Since returning from his most recent start-up, he has moved his focus to ensembles of people and is investigating the interaction of technology, work, and money. In particular, he is interested in understanding, quantitatively, the impact of technological progress on the labor market and innovation. He is developing social technology and alternative monetary systems that can reduce poverty and opportunity inequality as well as support innovation and creativity in a post-labor economy. His main effort is on ZUZ, a financial inclusion tool that combines lending and payment on a single distributed ledger-based system. ZUZ builds on local trust to increase access to capital and create a functioning bottom-up community currency from each individually issued ZUZ.

Some of Seth’s work:

Relevant links for Seth:

Key Questions for our Panelists

Some of the questions we’ll explore during the panel include:

  • How do you track or quantify reputation within a community?
  • What are the benefits of social reputation in credit or purchasing markets?
  • What happens if someone defaults on their financial obligation?
  • What design choices go into creating reputation systems?
  • What is used to register someone’s identity in the system?
    • Is having a pseudo anonymous identity possible?
    • Can people pay for privacy?
  • How do you build trust in such systems (both trust in the system and trust amongst people)?
  • What tensions exist between transparency and privacy?

Watching the Panel

The Summit is taking place virtually from August 5-7. The panel will air from 2:50p-3:30p on August 5th. Get your free tickets here.


Here is our latest draft White Paper for Defterhane Protocol (formerly DEF Protocol) :


Thanks, @Jetwell, I’ve updated your ‘Relevant Links’ Section to include the whitepaper. Congrats on the release.


So excited to hear about these reputation-based systems. Their functions of helping people to raise capital, keeping more trades local, and supporting people in need are really meaningful. And its mechanism of internalization of externality is also fascinating. As the speakers mentioned, it’s also important for governments to take a role in these matters. On the other hand, are these kinds of platforms regulated as e-payment platforms or third-party payment service providers in your country? Or its regulation intensity could be reasonably lessened due to its DLT-based characters such as transparency, immutability, and verifiability? This might be an interesting issue for regulation. I think these platforms are nice systems that can achieve those great purposes and do not need too intensive regulation when they are equipped with good design.


I found these two projects (Defterhȃne Protocol and ZUZ) very interesting. They both try to build models of society based on local, circular communities and economies etc. The history and concept of Vadeli checks is also really interesting, and I hope there are other unknown community-based models like it. It was a reminder that money is not always represented and used in the same way in different times, cultures, and geographies.

It appears to me that the main open research questions/discussions emerging from these SCRF summit interventions are related to “how much privacy do we need” ? Or as Eugene stated “tensions between transparency and privacy”.

Zero Knowledge Proofs (ZKP)s often come as a way to ensure the transparency property while keeping a certain level of users’ privacy. Indeed, ZKPs enable users to prevent giving unnecessary details to services requiring trust. However, even with ZKPs, a third party would still need to attest to the identity/reputation of users. We rely on multiple existing centralized third parties to prove the reputation of users using traditional methods (such as entities providing KYCs based on government-issued identity documents), otherwise we have to re-build it on-chain (a complex and still undefined process, notably for new users) which can involve to redefining what can be considered trust in the context of blockchains.

The controversy is that public blockchains are often described as trustless environments enabling the removal of any unnecessary intermediaries. Therefore the process of adding a centralized third-party to bring trust in a trustless environment may be a point of discussion, but maybe only a portion of this environment would need to be trustless?

Perhaps the need for privacy depends on the service provided and on the type of users (e.g. a loan within a circular economy would not require the same transparency as someone who buys their medication at the pharmacy). Some use cases indeed do not need to know who users are and can rely on trustless environments while others may need to rely on users’ reputations. An interesting research topic could be to identify which decentralized services do not need users’ identity ? Or what kind of trust can be replaced by smart contracts ?

This raises the point that a lot of concepts are dependent on such answers. I think there is a lot to do in blockchain ethics as we may have seen with AI and GDPR. However, several innovations are emerging and could serve as experimentations to better identify and demonstrate risks associated with blockchains usages.

My final open question is “ Do all decentralized services need to be on the same platform?”, or “Are the required properties of all decentralized services compatible enough to live within the same network/platform ?”

Separating all applications according to their properties would be very practical regarding privacy issues etc. but raises some major interoperability issues. Perhaps the future will allow communities to choose the protocol that best suits their needs. I think this will, at least, be the direction chosen by CBDCs which will certainly be different according to the political discourse.


Reflections on the Identity and Reputation Panel with Prof. Seth Copen Goldstein and Prof. Cemil Türün, moderated by Eugene Leventhal


It’s very fascinating to hear something like a sustainable local economy where people won’t deliberately cause tragedy of the commons. I like it especially when people won’t just put everything on Blockchain (which unfortunately happens) - the two projects by Dr. Goldstein and Mr. Türün sounds really promising, and blockchain can really be the catalyst to it when it comes to decentralize the reputation and/or credit system economy.

I got a project here with similar vision that I’d like to share:

Were highlighted by EF blog here:

Although I don’t know the history to them (supposedly funded by EF), this project (Unirep) could provide a direction and a reference for ppl to check, and to compare the assumptions (on anonymity/transparent/ways to build reputation as ppl discussed above), and maybe learn from each other.

A project spec and design description can be found here.

Very exciting to see how far the idea of decentralized credit/reputation can go in the near future!


Do you think you could do a little more to relate this project to the discussion above and the panel? How does the UniRep project provide additional context/insight to what’s being discussed?

It seems potentially interesting, but for this thread, it would be helpful if you could relate it to the discussion. Otherwise, it might make sense to have this be a thread of its own so that the focus of this thread can be on the implications of the panel discussion.

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Sorry for the deviated discussions!

Was meant to offer another angle, to see if different design rationale/philosophy could bring us different properties for the building of credit systems on Blockchain.
(I have to say, for practicality, the Defterhane Protocol is definitely very ideal as it already existed as a battle-tested form in Turkey for years. It also looked very suitable as the check endorsement structure is already very blockchain-y.)

Sorry that I can’t find details of ZUZlab.

Let me recap some of the interesting discussions, and see if the similarities and discrepancies between Defterhane Protocol and Unirep can help answering part of our discussions.

Please keep the following choices in mind when reading, these are open questions and some of them has already been told in the talk:

  • How decentralized and how radical do we need? i.e., Should we store everything on-chain and permissionless?
  • What kind of credit score and/or ranking system do we need? Shall the app itself provide a way to represent the user’s reputation as a guidance to other users/institutes? Or should the decision of risk assessment be left to end users?
  • What kind of leverage do we want to provide to users - is it only for loans? Or can it be used for other purposes? What kind of protocol flexbilitiy should be left in order for future expansion?
  • How transparent do we want? Wouldn’t it cause a dystopian future if ppl started to use credit/reputation scores to judge other ppl? (Young ppl are already doing this with twitter/instagram/ticktock stats, so it’s definitely an issue especially when it comes to financial applications - we want to return the leverage and benifits of financial inventions to regular ppl via a decentralized blockchain, not blocking them from it.)

  • Credit building/scoring of such

At the moment, it seems like that the Defterhane Protocol enables the transfer of credit on chain, which makes the whole Vadeli checks transfer system more convenient digitally.

However, it is not yet determined that whether the credit score/vetting system will be implemented on-chain or off-chain, i.e., embrace the compliance and existing credit score system.

During its first phase, the protocol uses the Credit Bureau of Turkey’s risk reports as a vetting system, until its own can be developed. This will consist of insurance, a scoring mechanism, and a Business to Consumer (B2C) interface.

That is, if one successfully completed a numerous check exchange via Defterhane protocol, it’s unsure that how would Defterhane protocol would calculate his/her credit score increase.

It’s human nature to follow what the government says, or your hardwork will be gone within days. It’s also quite a hard topic whether to implementing a scoring system on chain - the decentralized and anonymous radical approach.

However if we were being so radical and an anarchist - there’s actually a way that you can build a decentralized scoring system without the interference of layer 2 i.e., it’s anti-censorship.

The current iteration of Unirep brings a way for credit score building, and I believe that other ppl can learn or borrow from its cryptographic primitives. (Open source yay)

Currently, Unirep only does the following things:
(However, it can be reconstructed to fulfill other desired properties - please keep this thing in mind)

  • Attesters can upvote +1, or downvote -1, reputation, to certain epoch key (user).
    The process is anonymous - the attester only knew the epoch / topic / behavior he attested, not the user.
  • The attested reputation is and will be processed. It’s non-repudiable.
  • Reputation score itself is hidden.
  • Users can choose to prove if his/her reputation is higher than a certain threshold, when needed (like, when he/she wants to use certain services).

That’s it. Quite simplistic, but the core property is not possible without zk, a sort of set membership proof, and interesting ways to handle state transition function inside the circuit.

I can imagine if Defterhane Protocol wants to bring in scoring mechanism and realize it on-chain, this kind of anonymity-heavy and completely decentralized solution can also be considered.

The only similar project that I can find is this one:
But the github repo is non-public at the moment.

So, here’s my take.

As the panelists said, we did not fully utilize the potential of credit on the blockchain.
AFAIK, we only can achieve such things via staking atm.

However, as a temporary solution, if we come out of some methods that can…quantify? your behavior on chain, and I believe that it will be a good alternative/assistance to staking, before we figure out the correct way to bring/not to bring traditional credit score and risk assessment on chain, finally getting rid of BAD BAD S&P/Moody’s/Fitch credit scores. (it’s not for natural person, but still bad IMO.)


So here is what happened the night I was reading the white paper:

I went to dinner with my parents and I was filled with the ideas and potential of the vadeli checks. I remembered how we as a child used checkes here in Denmark too. So I started asking them about that. They told me how they - just like Vadeli checks - you would sign on the back of them when you passed them on. I asked if you could pass them on between more than 2 people, and they confirmed that chains like that was possible. But where vedali is used between merchants, the Danish checkes was used by individuals too, to pay for goods in stores.

The reputation part is the same though, and that is also where my curiosity takes me. Like, my mother told about a former boss who always said that if you are accepting a check you must make sure you trust the person.

That is of interest to me. Could this be a way to anyone to create credit out of their name and reputation on the blockchain. It’s worth finding out and researching - for now I document in videos.


A question for @Jetwell – one of the things that makes Vadeli checks decentralized is that once they’re out of the bank, they exist completely independently of the banking system… longterm, are there any plans to offer some kind of decentralized hardware for merchants (perhaps even something capable of running a node) for Defterhane?


Yes, that is an option. Hardware and software for running blockchain nodes on open source CPUs like RISC-V is very possible. That way, the decentralized mobile telephones will act as: 1) miners-validators, 2) payment gateways, 3) like VISA and M/C, financial network systems.


could this be placed in something like a car too? To drive & mine.

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Yes, it can. Cars are full of chips anyway! :)


This is truly an improvement from keeping the ledger on a physical object.

My take on the questions would be these:

  • It feels a little unusual to see compensation as a loan, as if it was not earned
  • Tightly knitted communities may not rely on mobile phones to connect with each other. Hence they will have trouble adapting to the technology

Otherwise, it’s a great way to maintain independence.

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