I totally agree that marginal sales of creditworthiness are often totally fine. A system does not become badly exploitable just because on some occasion someone can buy some creditworthiness (and indeed, as I try to describe in some of the FAQ, there are often legitimate coordination problems that can be solved with money, which should increase expected future returns, and as such legitimately increase your creditworthiness, which can look like direct purchases of perceived creditworthiness, but actually increase your underlying creditworthiness in a way that makes it fine).
The issue is when you can keep pressing the perceived creditworthiness buy button without actually increasing future expected total returns, and when you can do so a lot of times even as you grow.
Buying creditworthiness allows competent new entrants to get investors/support grow quicker than they otherwise would.
I think you are conflating here, as I try to clarify in the previous part of this comment, the concept of “buying creditworthiness” and “marketing”. Marketing is not centrally about buying creditworthiness (though a bit of it is). It’s mostly about information exchange. Referral programs are about incentivizing people to cause important information about opportunities to be exchanged, not for people to vouch for you. Referral programs are totally fine, unless they extend into misleading people about your actual creditworthiness.
I totally agree that marginal sales of creditworthiness are often totally fine. A system does not become badly exploitable just because on some occasion someone can buy some creditworthiness (and indeed, as I try to describe in some of the FAQ, there are often legitimate coordination problems that can be solved with money, which should increase expected future returns, and as such legitimately increase your creditworthiness, which can look like direct purchases of perceived creditworthiness, but actually increase your underlying creditworthiness in a way that makes it fine).
The issue is when you can keep pressing the perceived creditworthiness buy button without actually increasing future expected total returns, and when you can do so a lot of times even as you grow.
I think you are conflating here, as I try to clarify in the previous part of this comment, the concept of “buying creditworthiness” and “marketing”. Marketing is not centrally about buying creditworthiness (though a bit of it is). It’s mostly about information exchange. Referral programs are about incentivizing people to cause important information about opportunities to be exchanged, not for people to vouch for you. Referral programs are totally fine, unless they extend into misleading people about your actual creditworthiness.