# Reputation System

## 👥 Why Reputation Matters

In traditional token-based governance models, influence is directly tied to token holdings. This creates an imbalance where large holders (whales) can dominate voting power regardless of their actual contribution or participation in the ecosystem. Server Protocol introduces a **reputation system** to solve this.

Reputation ensures that **influence is earned through consistent and meaningful participation**, not simply held through passive staking or capital.

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## 🧮 How It Works

Users can earn **Reputation Points** (RP) by participating actively through $BYTES, specifically by:

* **Voting on project proposals**
* **Proposing new projects**

Each time a user spends $BYTES, they are rewarded with RP — but with controlled limits and rules to maintain fairness.

## **📈 Reputation Point Accumulation:**

* **+1 RP** for every $BYTES-based action (proposal or vote)
* A maximum of **3 Reputation Points per day** can be earned
* A global cap of **20 Reputation Points per user**

This system rewards active users without allowing excessive accumulation in short periods.

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## ⏳ Reputation Decay Mechanism

To encourage **continuous engagement**, users who stop participating will gradually **lose Reputation Points over time**.

* After **1 week of inactivity** (no $BYTES spent), the user begins to lose **1 RP per week**
* This continues until the user reaches **0 RP**, unless reactivated through new votes or proposals

This decay system protects the protocol against dormant wallets or whales passively holding influence over time without participating.

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## ⚖️ Impact of Reputation on Governance

Reputation directly affects voting power. The weight of a user's vote is calculated as:

```
Voting Weight = $BYTES Spent × Reputation Score
```

This creates a model where:

* Active users with a high reputation gain more influence in decision-making
* Inactive users gradually lose their ability to steer the protocol
* Capital alone is not sufficient to dominate governance

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## 🔒 Anti-Manipulation Safeguards

* **One vote per user per project**: Users can’t vote multiple times on the same proposal.
* **Vote direction change is allowed** (positive to negative or vice versa), but not additive.
* Reputation is **non-transferable**, tied to a wallet's history of participation, making it resistant to market speculation or farming.
