Dynamic NFT-based reputation model

[IMPACT] Please describe your proposed solution.

For the self-sovereign pseudonymous reputational model to work, two new technologies will need to be developed, i.e. non-transferable (soulbound) tokens and dynamic content NFTs. This contribution by Iagon will be beneficial to users and projects across the whole Cardano ecosystem. The reputational model is a combination of both of these unique concepts.

By combining the EUXTO model and Iagon's decentralized storage mechanics, reputational information on a user's wallet could be collected by a project and stored on Iagon's decentralized storage network. The on-chain file index tied to a user's wallet would work as a pointer to data dynamically updated by projects with information concerning the user's participation/behavior. A user whose wallet is the subject of data collection/storage can determine the data access rights on-chain by submitting restrictions/permissions as parts of transactions.

This way, a project can collect reputational information on a user, who can then choose to either share this collected data or remain anonymous when joining a new project. That allows the user to place a "social collateral" as a form of non-financial commitment when joining a new project, essentially "putting their reputation on the line."

Projects are incentivized to use this as a cheap, decentralized data storage solution and to share their collected data with other projects while maintaining user sovereignty.

[IMPACT] Please describe how your proposed solution will address the Challenge that you have submitted it in.

The purpose of this reputational model is to create a system for projects to collect, use and share information about their pseudonymous users while maintaining user data sovereignty. This kind of concept is the opposite of how current data monoliths such as Google and Facebook collect and use their data.

Data-powered on-chain identity and credibility scores are based on information concerning previous user performance. Users are incentivized to improve their on-chain reputation and maximize their score by providing stable resources of storage or computing power etc. The reputation score can be used to evaluate a resource provider's resources, latency, usage of green energy, etc. in real-time.

We intend to combine two new technologies, non-transferable (soulbound) tokens and dynamic content NFTs, to contribute to the reputational model.

• Non-transferable (soulbound) tokens

A “soulbound token” is a useful construction with a wide range of applications outside the intended scope of this proposal. Iagon’s intention is to design a solution that would be relevant and available to other projects willing to use this tool for innovation purposes.

Step 1: A Cardano-based project wants to record a soul point on a user’s wallet. 

Step 2: A “basic” soul point is stored on-chain as a UTXO containing relevant data.

Step 3: The user, Ava, can either endorse the basic soul point or reject it (by using one of two smart contracts capable of redeeming the UTXO).

Step 4: Ava wishes to discard the soul point and calls a “burn point” contract which redeems the UTXO, effectively removing it from the chain.

Step 5: Ava accepts the soul point and interacts with an “allow point” contract, which assigns a new “endorsed” signature to the soul point.

Step 6: Ava has the possibility to reconsider at any time and burn the soul point.

• Dynamic content NFTs

NFTs are generally used for holding unique, static pieces of information on-chain. However, in many cases being able to dynamically update the data off-chain would be a highly desirable feature. This could be done without compromising the crucial decentralization aspect normally required by NFTs.

Usually, data reference stored with the actual NFT is a hash of the data, searchable in protocols relying on the IPFS content-based storage. Unfortunately, this means the referenced data cannot be changed without issuing a dedicated transaction that would update the on-chain data reference.

With the implementation of Iagon’s decentralized data storage network solution, the NFT could rather function as a pointer to a file. The contents of the file would be subject to change by users with certain access rights.

Such a change would be a true game-changer for crypto gaming projects, as users’ actions could have an impact on NFTs without generating transaction costs or congesting the chain. There are countless other potential applications for this.

To sum up, the combination of soulbound tokens and dynamic data content lends itself perfectly to creating a reputational model for pseudonymous wallets while maintaining user sovereignty. It would enable users to take an “opt-in” approach to data collection and sharing.

[IMPACT] What are the main risks that could prevent you from delivering the project successfully and please explain how you will mitigate each risk?

This is by far one of the most ambitious objectives, and there is still a lot to uncover.

In terms of design, the main obstacle will be the business model, i.e. enabling proper monetization of data without compromising the core values of user sovereignty and compliance. The first concern pertains to intellectual property rights/company secrets for the projects involved. For example, data collected from the users could relate to a proprietary algorithm or other intellectual property. The output of this data collection could be considered sensitive information. If a user has full access to all that information, including the processed data collected from their interactions, it might put that intellectual property at stake. Hence, a lot of projects would refrain from using the solution.

The second concern is related to data deletion. What if a user behaves poorly and wants to delete their behavior records? As a user can always register a new wallet and start from scratch, they might just as well be allowed to delete some of their data. It's a question of how to handle deletion requests. If we allow the scope of deletion requests to be too narrow, i.e. users could erase all the negative information and only keep positive records, the concept of social collateralization is void. Allowing users to only wipe all data, without any granularity, is on the other side of the spectrum. Whenever a user edits their data, they're back to square one. In this case, the only positive aspect of the system would be not having to register a new wallet to start from scratch.

[FEASIBILITY] Please provide a detailed plan, including timeline and key milestones for delivering your proposal.

So far, we're only in the initial stage of idea finalization. We have discussed the use cases for collaborative work with Genius yield. We anticipate more stages, related to the design or architecture. We expect the whole timeline will account for at least six months.

To be more specific, the stages can be broken down into:

Phase 1:

Develop the business model.

Develop and implement a new token type.

Phase 2:

Integrate Iagon's solution with the new token type.

Work with wallet developers on the adoption of new token standards.

Phase 3:

Deploy the reputational product.

Collaborate with projects and market to users.

[FEASIBILITY] Please provide a detailed budget breakdown.

The budget will be mainly spent on the following: 

1. Market research, competitor analysis, and Use Case Explorer
2. Architectural and technical design
3. Consultancy fees
4. Development costs
5. Audits and security 

There are two options where we get all costs considered in this proposal, please see details:

[FEASIBILITY] Please provide details of the people who will work on the project.

The initial idea came from Iagon's CEO, Navjit Dhaliwal, and the algorithm developer & Advisor of Iagon Trym Måke Bruset. More details concerning the project design will be provided by them. Additionally, we will collaborate with Genius yield.

For NFTs-related development and on-chain development, Iagon needs to hire an external Plutus developer. Kirill Elizarov and his team from MetaLamp will work together with Iagon´s in-house engineering team.

Besides, Iagon will need to hire a third-party auditing team to check the security of our coding.

Lastly, in order to achieve this project, we will work together with our potential collaborators: DC Spark, Genius Yield (confirmed), Vacuum labs.

We will use Runtime Verficaiton as the third party for auditing.

[FEASIBILITY] If you are funded, will you return to Catalyst in a later round for further funding? Please explain why / why not.

Yes. This is a long-term project that can be beneficial not just for Iagon but also for other projects across the Cardano ecosystem.

[FEASIBILITY] Are you or any member of your team working on any other proposals in this Fund9?

[FEASIBILITY] Are you or your team working on any other proposals from previous Funds?

[AUDITABILITY] Please describe what you will measure to track your project's progress, and how will you measure these?

Our internal product and engineering team adopts Agile methodology and conducts sprint planning for the project to track progress. Iagon's team will also perform QA and track the progress of external development resources. A third-party auditing firm will ensure the security of the whole project.

As for the Iagon’s internal team (see who we are here: https://iagon.com/about ), we’ve got a group of Haskell developers who can work on the Cardano side smart contracts. The project will be led by the Iagon’s head of engineering, Andrew Ong, and Iagon’s tech advisor, Trym Måke Bruset.

Genius Yield has confirmed a partnership with us. We are also considering potential partnership opportunities with DC Spark and Vacuum labs.

[AUDITABILITY] What does success for this project look like?

The project will be considered a success if we reach the following milestones:

1. Implementation of the non-transferrable token.
2. Enabling performance data sync in the dynamic content NFTs to generate an overall reputation score.
3. Integration of Iagon's platform with the non-transferrable token type and implementation of the reputational dynamic NFTs in Iagon's ecosystem.
4. Deployment of the reputation model as a standalone product and collaboration with other web 3.0 projects or systems that would adopt it as on-chain identity and credit score.

[AUDITABILITY] Please provide information on whether this proposal is a continuation of a previously funded project in Catalyst or an entirely new one.

It is an entirely new project.