Coinbase Urges Developers to Build On-Chain Reputation System to Enhance Trust in DeFi Applications Using ENS. Coinbase, one of the world's leading cryptocurrency exchanges, is urging developers to focus on building an on-chain reputation system that can establish trust between users.
The exchange believes that such a system could go a long way in ensuring that certain criteria are met before an on-chain identity can interact with a DeFi application. Coinbase suggests that a credit score or rank-like system could be implemented to build trust onchain.
Coinbase has highlighted the importance of building trust in DeFi applications, especially as the sector continues to grow rapidly. The exchange suggests that an on-chain reputation system could help establish trust between users and reduce the risk of fraud or scams. By implementing a system that establishes a credit score or rank-like system on ENS names, ratings/reviews for merchants, and other measures that help build trust onchain, Coinbase believes that developers can enhance the user experience and attract more users to DeFi applications.
However, Coinbase has emphasised that any reputation protocol must preserve user privacy and autonomy. The exchange believes that developers must strike a balance between building trust and maintaining user privacy. Coinbase is urging developers to work on building a reputation protocol that can achieve both objectives simultaneously.
In conclusion, Coinbase's call to action is timely, as the need for an on-chain reputation system is becoming more critical as DeFi applications continue to gain popularity. By building trust onchain, developers can attract more users to DeFi applications, reduce the risk of fraud or scams, and improve the overall user experience. Developers must heed Coinbase's call to action and work towards building a reputation protocol that preserves user privacy and autonomy while enhancing trust onchain.
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