An ethereum address, if treated as personal identifier, could be a basis for self-sovereign identity system (like 3Box). There are many ways to build a reputation system using these IDs, and one possible approach is verifiable claims model, where an on-chain claims registry is deployed to which anyone can submit a claim about some ethereum ID and everyone can verify the existence and validity of this claim. The problem arises when we need to decide which claims can be trusted and which ones can not. Decentralized arbitration system such as Kleros or Aragon Court could help solve this problem.
If someone is willing to submit a claim about himself, then he simply calls registry contract and provides evidence along with the arbitration fee. This action creates a dispute and then the jury verifies provided evidence. If it rules in favor of the ID owner, then the claim is included into registry. If the owner of the ID disagrees with the ruling then he can begin the appeal process. It is not clear whether 3rd parties should be able to submit a claim. But if they are allowed to do that, the process would be similar.
This allows a multi-dimensional reputation system with various types of claims including those based on offchain sources:
Different verifiers (such as DAOs and other voting systems) can set their own criteria on what constitutes a good reputation for an external actor by specifying types of claims they consider appropriate and trustworthy. Additionaly, they can set a requirement that certain claims must be issued within a certain time period.
What do you think?