diff --git a/contracts/schemes/ReputationFromToken.sol b/contracts/schemes/ReputationFromToken.sol
new file mode 100644
index 00000000..20e9ce23
--- /dev/null
+++ b/contracts/schemes/ReputationFromToken.sol
@@ -0,0 +1,47 @@
+pragma solidity ^0.5.4;
+
+import "../controller/ControllerInterface.sol";
+import "openzeppelin-solidity/contracts/token/ERC20/IERC20.sol";
+
+/**
+ * @title A scheme for reputation allocation according to token balances
+ */
+
+contract ReputationFromToken {
+
+    IERC20 public tokenContract;
+    //      beneficiary -> bool
+    mapping(address     => bool) public redeems;
+    Avatar public avatar;
+
+    event Redeem(address indexed _beneficiary, address indexed _sender, uint256 _amount);
+
+    /**
+     * @dev initialize
+     * @param _avatar the avatar to mint reputation from
+     * @param _tokenContract the token contract
+     */
+    function initialize(Avatar _avatar, IERC20 _tokenContract) external
+    {
+        require(avatar == Avatar(0), "can be called only one time");
+        require(_avatar != Avatar(0), "avatar cannot be zero");
+        tokenContract = _tokenContract;
+        avatar = _avatar;
+    }
+
+    /**
+     * @dev redeem function
+     * @param _beneficiary the beneficiary address to redeem for
+     */
+    function redeem(address _beneficiary) public {
+        require(avatar != Avatar(0), "should initialize first");
+        require(redeems[msg.sender] == false, "redeeming twice from the same account is not allowed");
+        redeems[msg.sender] = true;
+        uint256 tokenAmount = tokenContract.balanceOf(msg.sender);
+        require(
+        ControllerInterface(
+        avatar.owner())
+        .mintReputation(tokenAmount, _beneficiary, address(avatar)), "mint reputation should succeed");
+        emit Redeem(_beneficiary, msg.sender, tokenAmount);
+    }
+}
diff --git a/contracts/test/ExternalTokenLockerMock.sol b/contracts/test/ExternalTokenLockerMock.sol
index 96e87e04..775341aa 100644
--- a/contracts/test/ExternalTokenLockerMock.sol
+++ b/contracts/test/ExternalTokenLockerMock.sol
@@ -5,9 +5,13 @@ import "openzeppelin-solidity/contracts/ownership/Ownable.sol";
 contract ExternalTokenLockerMock is Ownable {
 
     // user => amount
-    mapping (address => uint) public lockedTokenBalances;
+    mapping (address => uint256) public lockedTokenBalances;
 
     function lock(uint256 _amount, address _beneficiary) public onlyOwner {
         lockedTokenBalances[_beneficiary] = _amount;
     }
+
+    function balanceOf(address _beneficiary) public view returns(uint256) {
+        return lockedTokenBalances[_beneficiary];
+    }
 }
diff --git a/test/reputationfromtoken.js b/test/reputationfromtoken.js
new file mode 100644
index 00000000..07210e9e
--- /dev/null
+++ b/test/reputationfromtoken.js
@@ -0,0 +1,70 @@
+const helpers = require('./helpers');
+const DaoCreator = artifacts.require("./DaoCreator.sol");
+const ControllerCreator = artifacts.require("./ControllerCreator.sol");
+const constants = require('./constants');
+var ReputationFromToken = artifacts.require("./ReputationFromToken.sol");
+var ExternalTokenLockerMock = artifacts.require("./ExternalTokenLockerMock.sol");
+
+const setup = async function (accounts, _initialize = true) {
+   var testSetup = new helpers.TestSetup();
+   var controllerCreator = await ControllerCreator.new({gas: constants.ARC_GAS_LIMIT});
+   testSetup.daoCreator = await DaoCreator.new(controllerCreator.address,{gas:constants.ARC_GAS_LIMIT});
+   testSetup.org = await helpers.setupOrganization(testSetup.daoCreator,accounts[0],1000,1000);
+   testSetup.extetnalTokenLockerMock = await ExternalTokenLockerMock.new();
+   await testSetup.extetnalTokenLockerMock.lock(100,accounts[0]);
+   await testSetup.extetnalTokenLockerMock.lock(200,accounts[1]);
+   await testSetup.extetnalTokenLockerMock.lock(300,accounts[2]);
+
+   testSetup.reputationFromToken = await ReputationFromToken.new();
+   if (_initialize === true) {
+     await testSetup.reputationFromToken.initialize(testSetup.org.avatar.address,
+                                                    testSetup.extetnalTokenLockerMock.address);
+   }
+
+   var permissions = "0x00000000";
+   await testSetup.daoCreator.setSchemes(testSetup.org.avatar.address,[testSetup.reputationFromToken.address],[helpers.NULL_HASH],[permissions],"metaData");
+   return testSetup;
+};
+
+contract('ReputationFromToken', accounts => {
+    it("initialize", async () => {
+      let testSetup = await setup(accounts);
+      assert.equal(await testSetup.reputationFromToken.tokenContract(),testSetup.extetnalTokenLockerMock.address);
+      assert.equal(await testSetup.reputationFromToken.avatar(),testSetup.org.avatar.address);
+    });
+
+    it("externalLockingMock is onlyOwner", async () => {
+      let testSetup = await setup(accounts);
+      try {
+        await testSetup.extetnalTokenLockerMock.lock(1030,accounts[3],{from:accounts[1]});
+        assert(false, "externalLockingMock is onlyOwner");
+      } catch(error) {
+        helpers.assertVMException(error);
+      }
+
+    });
+
+    it("redeem", async () => {
+      let testSetup = await setup(accounts);
+      var tx = await testSetup.reputationFromToken.redeem(accounts[1]);
+      assert.equal(tx.logs.length,1);
+      assert.equal(tx.logs[0].event,"Redeem");
+      assert.equal(tx.logs[0].args._beneficiary,accounts[1]);
+      assert.equal(tx.logs[0].args._amount,100);
+      assert.equal(tx.logs[0].args._sender,accounts[0]);
+      assert.equal(await testSetup.org.reputation.balanceOf(accounts[0]),1000);
+      assert.equal(await testSetup.org.reputation.balanceOf(accounts[1]),100);
+    });
+
+    it("cannot initialize twice", async () => {
+        let testSetup = await setup(accounts);
+        try {
+             await testSetup.reputationFromToken.initialize(testSetup.org.avatar.address,
+                                                            testSetup.extetnalTokenLockerMock.address,
+                                                            );
+             assert(false, "cannot initialize twice");
+           } catch(error) {
+             helpers.assertVMException(error);
+           }
+    });
+});