Countering Corruption

Semada offers an infrastructure of crypto-economic incentives that encourages productive contributions to the platform and inhibits malicious conduct.

Semada’s structure creates an incentive-driven positive feedback loop.

  1. Between the forum and the public, the forum must provide useful smart contract templates, evidence of platform expertise, and evidence of past successful business in the forum. Then the public will engage the bench with fees and smart contracts.

  2. Between the public and the bench, the public must choose the proper smart contracting language (including proper fees and type of work), when engaging an expert. Then the bench will improve the forum with evidence of successful work.

  3. Between the bench and the forum, experts must improve and police the forum through evidence of successful work verified in a fair validation pool, and by adding useful smart contracting templates and effective policies. Then the forum will give the public theconfidence to write smart contracts.

The process of interaction between the branches is designed to be fairly balanced. Since all newly minted tokens are staked 50/50 for and against the post and all losers’ tokens are split by the winners, the system encourages careful and judicious self-policing. This 50/50 balance encourages unbiased and truth-seeking voting, since neither side is favored. Since all fees are split between sem token holders in the weighted salary, the entire incentive in the system is to acquire reputation, balancing the motivations of protecting the value of reputation in the expertise tag and earning new fees for the expertise tag. Finally since all fees that come into the platform are disbursed to the expert users and not to any asymmetrically powerful outside owners of the platform, the system is internally balanced against outside corruption.

Therefore the feedback loop of the Semada platform is ​closed​, in the sense that there are no rent-seeking6 owners: The system is entirely supported by users, and the users reap the entire profit.

The anonymity of the experts and the openness of the public posts of work evidence in the forum focuses the energies of users on the true essence of reputation​—​i.e., ability and positive contributions​—​while discouraging the corruption associated with identity and rent-seeking behavior.