Crypto enthusiast, exploring the world of blockchains with wide eyes and open ears
Credibility has an important role in our lives, we rely on it on a day to day basis, be it hiring help for daily mundane tasks or for making significant decisions like buying a vehicle or a house.
Taking the feedback or review about a product or service is important as it assures that the promised quality is delivered and it's worth the money paid. This in turn implies that the source of feedback should be genuine and authentic, or else the feedback or reviews given by it will not be worth it's salt.
In a nutshell it's an intercorrelated system in which all the relevant stakeholders have their own credibility score. An entity with higher credibility would attract more business and hence more wealth.
The Credit score is used to quantify the financial credibility of an individual or an organization or even a nation. It reflects the credit worthiness or the likelihood of the entity to repay debt, it plays a pivotal role in the loan approval process.
Banks or private agencies conduct due diligence and evaluate the worthiness of an entity. The Credit score is plotted on a spectrum of values, higher the value better it is. Few key parameters taken into consideration are:
Before a new credit is given to an entity financial institutions make a hard enquiry, interestingly too many enquiries hurt the credit score.
Advantages of a good Credit Score
Having such a score is helpful in maintaining parity, high scorers are rewarded with superior financial offerings and poor scorers are penalised with lower quality products. The most renowned credit rating entities are Moody's, Standard & Poor's (S&P's), and Fitch Ratings.
The blockchain technology by being rudimentary decentralised in structure thrives on a strong community for existence & growth. Similar to banks depending on credit agencies for an authentic credit score, there is a need for a participant score for this industry.
A participant score can be used to reward good contributors, separating them from people who are just freeriders, who are in to make a quick gain and not concerned about the real success of a project.
To leverage the power of community projects should engage their members, the community participants will have to be involved deeply and then only the bigger goal of mass decentralisation would be achieved.
This is a non exhaustive list of sample parameters:
Each parameter may be given proportional importance while calculating the participant score.
HODL Score is one such example of a Participant score. It is implemented by Freehold which works on Proof of Transfer (PoX) consensus. It measures the asset creation history of each participant as a contributor to the community.
Community members with higher HODL score are more concerned about the project's goal & success and they get more opportunities to collaborate & get rewarded. HODL Score ranges from 630 to 850 where,
Cryptocurrency space has thousands of active projects, it's imperative that community power has to be harnessed for the success of this industry. A metric such as a Participant Score can be a game changer, a positive sum community can play a pivotal role in quicker success of the projects. One such example is HODL Score proposed by Freehold.
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