TrustScore is a Universal Score indicating the trustworthiness of an individual or firm based on historical transactions stored in Proof of Reputation based Smart Contracts built on Matic Blockchain. The product was announced on Saturday by Koinfox and one can join the waitlist to use it.
Cryptocurrency trading platform Koinfox earlier today announced the launch of TrustScore, a score of an individual or a company that is calculated based on their past performance. Their past performance is recorded on interconnected smart contracts. The entire scoring system is dubbed as Proof of Reputation.
Taking a step back, rating or scoring company performances or an individual is not a new concept. However, doing it over a decentralised network is something we don’t see happen that often.
Koinfox says the smart contracts are built on Matic, which is a layer 2 blockchain on Ethereum helping in speeding up the transactions on multi-folds. “Our POR Smart Contracts are deployed on the Matic Network blockchain as it acts as a layer 2 scaling solution with Ethereum blockchain as its base. Ethereum being a robust Smart Contract enabled blockchain and having a huge ecosystem of developers was an obvious choice.” says Ankitt Gaur the founder and CEO of Koinfox.
How does it work?
POR is designed for people who fall in three broad categories:
- Signal Operators – analyzing the success rate of signals to calculate Trustscore.
- Fund and Portfolio Managers – Trustscore can be calculated based on average return delivered
- Lending Platform users – Scored based on “Borrow and Repay” history of a DeFi user.
For the first two, the system generates feedback based on every transaction thereby recording the rating of individual service. With the help of past data on returns and portfolio management, the feedback so generated will be broadcast along with the signature. The nodes receive them, verify and store them in blocks. Once these blocks achieve their maximum capacity, the calculation ceases and the scores are recorded in transactions. A recalculation of the affirmed ranking is done again by the nodes. These scores can be accessed to understand which fund manager/Signal provider has in the past done well, and where to take your investments.
For lending operators in the DeFi space, the high collateral requirement due to lack of transparency about the borrower’s credibility, can be improved using TrustScore. Lenders can get a better assessment of the borrower, leading to reduction in collateral requirement, thus increasing liquidity and creating a safer borrowing and confident lending atmosphere.
The announcement comes a few days after the company’s co-founder Anshul Dhir ran a few polls on twitter and gave a hint about their new launch.
Observing an individual’s performance and storing it on blockchain to score them requires public blockchain to ensure immutability and to add a trust factor. Acknowledging the lack of speed on the Ethereum blockchain, Koinfox’s decision to build on Matic gives a boost to products envisioned and built by Indians which are ready to dominate the industry.
How well does the Trustscore system work can only be determined after the platform goes live. As of now, users can join their waiting list.
Would you look at the Trustscore of a fund before investing money? Let us know in the comments below.