Research on Credit Governance Based on Ethereum Smart Contracts

Abstract

Credit is one of the cornerstones of modern society, and credit governance is an important means of maintaining economic and social stability. However, credit governance has always faced challenges due to problems such as information asymmetry, fraudulent behavior, and lack of trust. The emergence of blockchain technology has brought new hopes and opportunities to enhance the level of credit governance. It creates conditions for establishing a more transparent and trustworthy credit system through decentralized credit records, immutable credit history, the application of smart contracts, privacy and authorization management, and cross-border collaboration. For example, in the financial field, smart contracts can also enable automated financial contracts and transactions. Based on the Ethereum blockchain's smart contract platform, this paper aims to propose a reward and punishment mechanism that can be used for participant management in a credit scoring system. This mechanism rewards or punishes participants' behavior based on their scores through the "coin-day destruction" mechanism, incentivizing positive behavior and penalizing misconduct. This paper believes that blockchain technology has significant potential for application in credit governance. However, the application of blockchain technology also faces challenges in terms of technology, law, and regulation, requiring joint efforts from all parties to truly enhance the level of credit governance.