The problem with this method is that step 2 is a UX nightmare; people don’t typically do that or do it to a very very veeery narrow set, ie “I trust my wife”

Do you have any examples of applications that are able to create a finely-grained and large WoT?

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No working examples that have been built, although the issue of fine grained vs coarse grained attestations is one that I think about a lot. As you point out, no one wants to create a new attestation for every fine grained category. The answer, I think, is to arrange categories in a hierarchy. If movies is the parent category and dramas, comedies and westerns are the child categories, then I can attest that you have good taste in movies, so no need to create separate attestations for each of the fine grained child categories. The hierarchy of categories will itself be curated by your web of trust. This blog post says all that with a little more detail:

https://prettygoodproject.substack.com/p/influence-and-context-in-the-grapevine