On that site with the webmaster who likes tearing friendships apart, this was known as "Loser Has To... Extreme Truths". Person 1 suggests a truth forfeit for the loser, player 2 accepts the challenge, and player 3 decides who loses and starts the new game. Example:
Of course I'll start us off. Loser has to answer 10 truth questions (no identifying info) and the winner will post the answers in a blog. If the loser wants this blog removed, they'll have to negotiate a deal with the winner.
Player 1: Loser has to answer 5 no-limit truth questions.
Player 2: I'm in!
Player 3: Player 2 loses. The next loser will start an AMA.
Player 4: I'm in!
etc, etc.
Of course I'll start us off. Loser has to answer 10 truth questions (no identifying info) and the winner will post the answers in a blog. If the loser wants this blog removed, they'll have to negotiate a deal with the winner.