I was once part of a wonderful chat community of computer geeks that got the 'bright' idea to add a member ranking system. Within weeks, the entire community came crashing down.
They started a system where you could have from 1 to 5 stars as your rank. All new members entered with at least 1 star (maybe higher if core admin team thought they deserved it). Additional stars could be added if you contributed in a positive way, or worked hard and put forth a genuine effort to increase your knowledge. Once you hit a level of 4 stars, you could vote on who was admitted to the group, and promotions to higher rank.
The intention of this system was to encourage more respect towards those that 'deserved' it and encourage people to work harder.
It completely backfired, with new members being labeled as 'worthless n00bs' and abused, and higher ranking members thinking they had some right to act obnoxious towards everyone, and demanding respect from anyone they outranked, even if they had done some horrible things to those people. (a kind of abusive forced ass kissing system) Others started kicking and banning visitors from the chatroom for no reason other than the fact they weren't 'official members'.
I had a rank of 3 stars, my father was given a rank of 4 stars when he joined (because he had been a professional programmer). I ended up having a fight with the admins when they wanted to give me a promotion to 4 stars. I didn't want it because I knew that would result in them abusing my father and treating him as if he were an idiot because he had the same rank as his daughter, who had a lot less computer experience.
I watched bright people be insulted and called stupid because they were new members (their rank was lower), treated as if they had nothing valuable to contribute. I watched people go on campaigns for votes once they learned they were added for consideration for an increase in rank.
It took only a few weeks for the entire community to go from being about computers and learning to being about stars and rank. It was horrible. The best members began walking away. No matter what happened or who left (even the guy that was hosting it left!), they wouldn't get rid of that stupid ranking system and things just kept getting worse & worse.
This was how my chat community got started. I flipped out in the chatroom one day about the behavior I was seeing and how it wasn't about learning any more and expressed a desire to walk and start my own, but couldn't I host it because I was on dialup. Another long time member who felt the same way offered to host it till I could, and we both left.
The major difference with the DonationCredits system here and the points, rank, etc. systems in other communities is that it's in the background. You can't see how many credits someone has. You can't see when they give or receive and who is doing the giving or receiving unless you are one of the parties involved in the transaction. There is no ranking of people based on their DonationCredits activities. You can't find anything to use to compare your 'status' to someone else. This is good....very good. It keeps people from losing their minds and becoming obsessed with 'status'.
We also have a little bird that is the symbol of generosity, that keeps an eye on the site and what people are doing, that secretly and unexpectedly rewards those that put forth an effort to help the community. You never know when he's watching or when he will decide to drop a few coins of appreciation in your lap.
In this community, contributing content has its own rewards. More stuff to read. More discussions to get involved in. More feedback from members. It has a snowball effect causing it to get better & better all the time. This attracts new members that want to be part of a community like this, and they contribute, making the snowball grow even larger.
I worry about some of the ideas that mouser has had, though.
Things like adding a mod to the forum that will allow people to rate posts to give more interesting posts a higher rank. Or some of the ideas he has for the Cody Club. It's not the spirit and intention of it that I am worried about. It's how it could encourage people to compete and create a false sense of superiority among members if these things were visible and comparable in some way. That's what I worry about. I really don't want to be a part of a community that is competitive like that or fighting for gold stars again.
I already had my heart broken and felt the pain caused by watching something I loved become destroyed by stuff like that. I don't want to go through that again.