TrustNet is the ratings system which works by applying the ratings or bans of your first-order associates, as well as your own. TrustNet also applies the ratings of your closest associates’ closest associates (i.e., those who are two links away from you in your network).
"TrustNet works like this:
• If I rate someone, I see them as +/-10
• If one of my closest associates (i.e., someone I’ve given a rating to) then rates Avatar X, I see Avatar X as +1. So in the illustration above, Alice sees Bob as +10 because she rated him positively, but she sees Carol as +1 because Bob rated her. Scores are added together, so that if Alice were to rate Carol, Carol would then be +11 for Alice.
• Negative ratings are not followed, so if Alice had rated Bob negatively, and Bob had rated Carol positively, Alice would see Bob as -10, but she wouldn’t have a score for Carol, since the branch would end at Bob.
• Positive branches are followed one step further, with a further 1/10th weighting. In the illlustration above, Alice sees Eve as -0.2. Alice has rated Bob as +10, so Bob’s ratings count as +/-1 for her. Bob has rated Carol and Dave as +10, so Alice sees them both as +1. Carol and Dave have both rated Eve as -10, so Alice sees her as -0.2. If they had both rated her positively, she would see her as +0.2. Bob sees her as -2 because he is one step closer to her in the tree" (http://www.3pointd.com/20070104/user-created-trust-networks-in-second-life/)
"One nice thing about TrustNet is that the ratings are not public and not universal, they change based on your point of view. This definitely seems better to me than just looking at the cumulative mass of anonymous ratings that can go into such scores — though that system works fine for eBay, for the most part. It’s in sharp contrast to a pos/neg rating system like the one found on Xbox Live, where you know only the percentage of people who have rated you positively or negatively, not the number of people. Thus a single negative rating means you have a 100 percent negative rating score. The problem here is compounded by the fact that the Xbox Live screen reports this as 100 percent of “people you’ve played with” rather than “people who have rated you,” which is actually the case." (http://www.3pointd.com/20070104/user-created-trust-networks-in-second-life/)