The PiChain Global reputation system

As discussed above, while the Web3 ecommerce transaction has the characteristics of an atomic swap, it is vital to ensure that the customer receives the product or service that they paid for and in the condition/at the service level described.

While the smart contract includes a trustless escrow system to enforce delivery and payment, all users of the platform are further motivated to transact honestly by our innovative incentive scheme.

Reputational incentives

Honesty by design

Before examining how the seller and customer are incentivized to develop their own reputations, let’s examine the game theory behind building reputations in an ecommerce marketplace.

Large ecommerce marketplaces have failed to address two major factors that reduce the quality of reviewing mechanisms. Firstly, customer reviews tend to have a negative skew. That is, without an incentive to provide feedback, reviewers tend to be biased toward the negative end of the spectrum. Secondly, in most reviewing systems, merchants are motivated to purchase fake reviews.

However, within an immutable, blockchain-dependent system, it is possible to ensure that only customers who have received goods or services may be eligible to leave reviews –- making creating fake reviews prohibitively expensive. Furthermore, by incentivizing buyers to leave reviews with $PCM rewards, customer feedback will regress toward the average experience.

The seller

To register as a merchant on PiChain Mall, sellers must pass a KYT (Know Your Trader) assessment. This enables the PiChain Global Ecosystem to retain real-world data on the sellers. Furthermore, sellers’ credibility is increased as they work to improve their PiChain Global Ecosystem reputation.

Seller reputation

A seller's reputation is calculated based on several factors, including but not limited to the following:

• Sales: Sales are an essential factor that shows how active and successful the seller is on the platform. Returns count against the seller.

• Customer Satisfaction: The quality of the seller’s goods and services will be measured by customer reviews and feedback. High satisfaction helps to improve credibility.

• Staking PCM: Sellers can choose to stake a certain amount of PCM tokens on the platform, which will show their commitment to ongoing participation.

• Marketing: Sellers can choose to market on the platform, which will also impact their credibility rating.

Seller incentives

Highly reputable sellers will receive a series of incentives to encourage them to provide high-quality products and services on the platform:

• Low transaction fees: Highly reputable sellers will enjoy lower transaction fees, which will reduce their operating costs.

• Higher PCM staking rewards: Sellers will receive PCM staking rewards based on their reputation score, which is a reward for their participation in the health of the platform.

• Lower promotion fees: Highly reputable sellers can enjoy lower promotion fees to better market their products.

• Higher Liquidity Provider (LP) rewards: Sellers will receive higher rewards if they provide liquidity to support LP pairs, which encourages them to participate in other aspects of network health.

• Voting Rights: If the ecosystem chooses to build a DAO (Decentralized Autonomous Organization), staked tokens can give sellers voting rights, allowing them to participate in governance decisions.

The customer

As customers do not have to undergo KYC (Know Your Customer) screening, it is important that individuals are incentivized to act in good faith. To this end, the customer may build credibility via the customer reputation system.

Customer reputation

A customer's credibility is calculated based on several factors, including:

• Purchase frequency: A customer’s purchase frequency shows how active they are on the platform, and activity is rewarded.

• Purchase value: A customer’s purchase value shows their contribution to the platform, and higher value spends are rewarded.

• Diversity: Buying items from different sellers, i.e. diversifying their buying behavior, helps improve a customer's credibility.

Customer incentives

High-reputation customers will also receive a range of incentives to reward their loyalty and engagement:

• Discounts and Offers: Customers with high credibility will receive different levels of discounts and offers, which enable them to purchase products at lower prices.

• Higher Liquidity Provider Rewards: Like sellers, customers who provide liquidity will also receive higher rewards.

• Voting Rights: If the ecosystem chooses to operate a DAO, customers can also receive governance voting rights based on their staked tokens to participate in platform governance decisions.

In those instances where reputational consequences fail to provide the level of service or quality of product the customer anticipated, there are two dispute resolution mechanisms available: automated dispute and third-party resolution. Furthermore, PiChain Mall provides a decentralized evaluation and comment system to assist with dispute resolution and transparency over communications.