By subtracting personas from the Status App, on-chain reputation and social capital will suffer systemic loss. Statistics show that when users’ disqualification by community voting is initiated through their violation of rules (e.g., transmission of false information frequency ≥3 times/week), their visibility in content reduces by 82% in 24 hours, and the fan number decreases at a rate of 1.2 per minute (normal daily increase +5 people). For example, KOL@CryptoProphet lost 47,000 followers after posting an unverified contract audit report (error rate ≥15%), which dropped to $230 after the DAO governance vote (support rate of 9,112,000), and the floor price of the related NFT project dropped 57% simultaneously.
The Status App’s on-chain reputation system permanently stores cancellation events. The suspended user’s “trust score” dropped from a base of 100 to below 20, and restoration to 60 required at least 50 compliance activities (e.g., passing a DAO proposal fix or on-chain skills certification exam). The data showed that the users who went through a cancellation event had only a 12% chance of regains the algorithm recommendation (78% for users not penalized), and the cost of Gas fees was increased by 30% (due to additional validation of transactions). For example, after developer @SolidityMaster’s protocol violation due to a code bug, the approval ratio of its new proposal from community voting dropped from the record high of 75% to 9%, and the repair time was as long as 6 months.
The economic penalty mechanism directly affects asset prices. The SNT token pledge pool of the blocked user will be frozen (5% to 100% deduction depending on the seriousness of the violation), and the liquidity of his/her NFT assets in the secondary market will be decreased by 93% (the pending order transaction cycle will be increased from 3 days to 21 days). In 2023, the creator of one universe property project was delisted for fraud in land auctions, the market value of virtual land he held fell from 480,000 to 73,000, and the associated DeFi lending position was compelled into liquidation (the mortgage level was below the 110% margin), causing a loss of $220,000.
Status App offers a very limited recovery channel, but at a price. Users need to pay “reputation repair money” (≥ 500 SNT, ≈ 95) and complete on-chain behavior verification (e.g., voting in governance for 30 consecutive days and the pass rate of proposals ≥ 704,200 (including time cost and resource usage), and the followers can restore to only 43% of the original size (median) after repair. For example, creator @TruthTeller took 4 months to regain the certification label by submitting 12 on-chain data verification reports (error rate ≤0.3%) and 600 hours of community service.
Technically, banning triggers automatic execution of smart contracts. The user’s wallet address is flagged (decreasing the success rate of cross-Dapp interactions by 22%), and highly connected individuals in the social network (engaged with ≥3 DAOs in total) receive a risk warning, leading to cooperation proposal rejections up to 68%. As the founder of a DeFi protocol was banned, the usage of its smart contract call declined from 14,000 times a day to 900 times and the protocol TVL (lock-up value total) fell by $180 million over 30 days.
User behavior data show that 29% of accounts that experienced a blocked event reconstructed their identity, while the remaining 71% either dropped out permanently or became anonymous (the maximum trust score for new accounts is 40 points). Psychological models show that when a user loses more than 63% of social capital (a weighted sum of followers/revenue/influence), the likelihood of dropping out increases to 88%. For instance, the @GhostWriter account, which was previously banned, was unbanned, but the rate of content engagement remained at only 2.1% (compared to 19% when the original account was at its peak), and the AD offer fell from 500 to 30 per post.
The Status App’s governance case indicates that swift crisis handling (compensation triggered within 72 hours) and open remediation (progress updates daily) can raise user retention from 12% to 51%. For example, the NFT project @ArtBlocks immediately dropped reward tokens (130% value lost) and stream the fix to code operation following a team error causing a foundry failure, and this resulted in a community vote reversing the blocking proposal (82% rejection rate), and the project value returned to 79% of the pre-crisis point. These facts validate that the management complexity of reputation assets in the decentralized social setting is far greater than that of conventional sites.