Transfers of reputation between accounts

[elenadimitrova]

7.6.3 Transfers of reputation between accounts

The most important quality of reputation that distinguishes it from a token is that it is tied to an account and cannot be transferred. However, in the event of disputes (Section 9) it can happen that one party to a dispute loses reputation while the other gains. This process has to be modelled as a ‘reputation transfer’ to ensure that reputation is never created in this process (i.e. the reputation lost by the loser is at least as much as the reputation gained by the winner).
If an entry in the reputation update log indicates that a dispute has occurred and been resolved, then there will be a number of transfers of reputation between users represented by a single entry. Each such transfer will have to accommodate the updates of all the parents of the reputation being gained by one user, and updates of all the parents and children of the reputation being lost by the other. However, we have to ensure that the user who is losing reputation still has the reputation to lose if another user is gaining it.
To achieve this, all the transactions that correspond to updating the reputations of the user gaining the reputation are done first. In the event such a transaction must be proved to be correct in the resolution protocol, the users can provide a proof of the losing user’s reputation, prior to them losing it in this event in update cycle, and this can be compared to the amount of reputation intended to be gained. Whichever is smaller is used as the amount of reputation the user is gaining
during the calculations.
Then, when calculating the reputation deduction to be applied to the losing user, the reputation that was used as the voting weight should be done last i.e. all the children and parents should be considered first, as it is the amount of the reputation that was eligible to vote that will determine the fraction lost of each of the child reputations.
For further details about reputation transfers and disputes, see Appendix A.