Author: Alice@Foresight Ventures
TL;DR
The potential value of DID is very large, and it will capture the huge value second only to the public chain.
Compared with Defi, gamefi and other projects, DID’s entry threshold and understanding cost are low enough, and it has a strong Matthew effect. It is expected to become a super entrance for users to enter web3.
DID can provide the same personalized content as web2, and at the same time, it can ensure that we have our own identity, preferences, and account information from being leaked and profited by others.
The identity layer on the chain brings new possibilities. It redefines the rights of identity, re-changes the power of identity, and returns the power of data realization to users.
We divide the DID identity stack into private key management layer-authentication layer-authorization layer-proof layer. The proof layer has a unique data advantage, which is the product form with the most potential to make a unified DID.
The competition for wallets in the future will be extremely fierce, not only the existing EOA wallet and aa wallet competition, but also cross-track players at the proof level may join the competition to provide users with a better identity account system and DID ecology.
1. What is DID decentralized identity
DID is the abbreviation of Decentralized Identifiers, that is, decentralized identity. The focus of DID is decentralization and then identity. In the world of web3, how we maintain a unified identity in a decentralized environment and how to use our identity is what we want to discuss in this article.
a. Traditional centralized identity
In the centralized platform of web2, our every sentence, every transaction, and every behavior are collected and recorded by the platform to analyze our preferences and habits to form user portraits. For the web2 platform, this is their tool for harvesting traffic. Fine user portraits plus big data algorithms push articles, videos, and even the next product you may like to your face, so that users can stay on this platform, while the centralized platform has how to control And the way to realize the traffic. this means
Control of platform content: For any creator who wants to provide content for platform users, they lose the opportunity to share their views when their content is deemed to violate regulations or not meet platform standards.
Control user data: All data generated on the platform is essentially the content written into the platform’s database, which is owned by the centralized platform. That is to say, the platform can modify or even delete the user’s personal information and account at any time. For example, Gmail once deleted the user’s Gmail account and emails due to manual review errors, and the user lost everyone’s contact information overnight.
b. Classification of Decentralized Identity
DID provides new possibilities, Users have complete control over the generation of identities and the use of identities. In the year from the proposal of DID to the crazy discussion in the market, we have seen different solutions based on the understanding of DID-based decentralized identities, including
Data type angle division includes
VC is the abbreviation of Verifiable Credential, which is a standard proposed by W3C in March 2022, and verifiers can prove its authenticity.
In the process of using VC, there will be three roles. The claimer holds the certificate, and the data in it needs to meet the requirements of fields, data types, and data sorting that match the certificate type. The notary Attester checks the data and confirms it is valid. Then use the private key to sign the VC, and then the verifier can verify the authenticity of the certificate without touching the notary and only needs to see the signed data.
VC itself is a standard that provides standards for different subjects to verify data. Although a certain degree of decentralization has been achieved, but VC data does not necessarily need to be uploaded to the chain, so the user’s data ownership is not guaranteed. At the same time, what VC describes is not the identity of the user, but only a certificate that meets a certain standard, such as education, medical insurance, so in the long run, VC may become the standard for Internet verification, but it is not a decentralized identity.
Soulbound NFT, Soulbound NFT does not support on-chain transfer, which means that SBT only belongs to a specific on-chain address
Based on the Soulbound NFT proposed by Vitalik, the data and information carried by NFT are “soul-bound” in the user’s wallet address, which adds non-transferable attributes and solves the illusion that users themselves have achievements or experience by purchasing NFT or achievements. , which binds the unity of user behavior and identity
But the other side of soul binding is that it cannot be unbound with NFT and user identity. In addition to the active display of POAP or NFT by the user, the user’s address can be maliciously airdropped NFT or maliciously labeled. In the case of transfer, the user can only be forced to accept and will be publicly displayed on the chain, causing the user’s reputation loss or even transaction failure, etc.
Onchain reputation The reputation on the chain reflects the identity of the user through the interactive behavior on the chain
A successful transaction means that it is written into the block on the chain and can be viewed and verified publicly. Of course, ZKP provides a way to directly verify the transaction result without publishing the specific transaction content. But every transaction and interaction of users on the chain can be recorded and analyzed. Whale alert itself is based on publicly visible data on the chain to track the behavior of large households. Nansen’s Smart Money label can be said to vividly display what Black Swan author Nassim Taleb said Don’t tell me what you think, show me your portfolio . The Degen score goes one step further, by analyzing the data on the chain, extracting the score as the proof of the user’s Degen, providing a new identity label,
However, these labels themselves lack reasonable context and background introduction. For example, the address marked by smart money may only be one of the wallet addresses of the institution, and the selling or purchasing behavior of a single address may not fully infer the institution’s strategy. Maybe this is just one leg of the delta neutra strategy. The act of an address alone is not enough to form a complete identity. Moreover, the reputation on the chain may be deceptive, because the user can compensate for the interaction after the event, or the illusion of reputation formed by purchasing in the secondary market. Of course, it is also possible to judge whether it is an ex-post compensation through the timeline and NFT transaction records, but This kind of on-chain data itself is a lag proof.
Decentralized domain name, the decentralized domain name opened by ENS can be said to be a decentralized identity in itself, and ENS’s name positioning based on ETH and its huge wealth effect have become a symbol of identity
ENS can directly reflect the identity through the name of the address by converting the seemingly garbled wallet address into a readable address. At the same time, the first launch effect and brand influence of ENS has basically become the domain name with the most application scenarios. At the same time, ENS can edit the content of websites and subdomain names, providing opportunities for customizing identities. At the same time, ENS is composable as a contract on the chain, and different applications can be combined on the chain. For example, Philand generates a metaverse unique to the user through the relevant information of ENS, and Kola lab generates music NFT based on the user’s ENS. The visualization of information can be said to be the representative of the composability of DID
However, the transaction attribute of ENS can untie the user identity and domain name identity, losing the continuity of identity. At the same time, the interaction based on the wallet address is still limited to the transaction information on the chain. At the same time, ENS is currently only based on the Ethereum main network. Facing the current Layer2, Layer3 and other multi-level networks and multi-chain environments, it may not be comprehensive and may not be accurate. , A complete description of a user’s identity, see the discussion of the wallet for details.
Wallet address, as the entrance for users to interact with dapps on the chain, it can be said that for DAPP and other wallet addresses are users, and the transaction records on the chain are the portraits of users.
Taking the wallet on the chain as the identity, such as Nansen smart wallet, can also be understood as the DID of the user in the transaction scenario. But in fact, a user may have multiple wallet accounts, and the transaction behavior of each account is different. For example, one of the wallets of an organization is doing unilateral strategy, and the other wallet is only doing delta neutra arbitrage behavior, so A single wallet cannot fully represent the actual behavior of a user. Moreover, in a multi-chain environment, each wallet is also an independent account, and users may have different transaction behaviors on different chains, so a single wallet on a certain chain cannot fully represent the user’s DID
At the same time, Lens, Galxe, etc. have also derived social graphs and Profile NFT social portraits through on-chain behaviors. However, most of the interactive behaviors on the chain are transactions. Currently, there is a lack of social application scenarios to provide social behaviors on the chain. Of course, we think that when the data infrastructure is perfect and the cost of on-chain is reduced, we can see a lot of social data in the future, so as to obtain more valuable social relationships
Stealth address The stealth address proposed by Vitalik can separate the right to use and view the wallet address, ensuring the isolation of user identity and assets
The characteristic of the blockchain is openness and transparency. For users, the identity of the user can be deduced through asset information and behavior on the chain. In the latest article, Vitalik proposed a new stealth address, which is temporarily generated by the user who initiates the transfer through elliptic curve encryption. Public key and private key, and then combined with the address of the receiving account to generate a secret address and transfer to this address, the receiving user can use his own private key combined with the temporary public key to see the assets of the secret address and receive money later Talent has the right to control this asset. It is equivalent to cutting off the connection with the user’s identity with a one-time new address.
But as Vitalik said, every time a new address is generated, it faces the problem of Gas payment. Although only the payee can control the account assets, the new address does not have enough Gas to pay the transfer fee. At the same time, the privacy of the secret address is only the privacy of the payee on one side, and it is still a transparent operation on the chain for the payer. The problem of Gas can be paid by abstract wallet management or relayer, and Vitalik proposes to use ZKP to prove the ownership of users and secret accounts, and even imagines that different addresses can be used for different DAPPs, allowing users to manage DAPPs. Visible information and assets. Of course, it is still difficult to implement ZKP, cross-chain and wallet design. We look forward to seeing new projects put forward implementation plans.
Cross-platform Avatar, the three-dimensional character image is more in line with our imagination of identity, and cross-platform Avatar can ensure the unity of identity
Although flat PFP NFT is also used as an avatar as a representative of identity, NFT itself is tradable and it is difficult to form a binding relationship between identity and NFT. The 3D properties of Avatar provide a visual image, and at the same time, as the incarnation of our metaverse, it has a unique identity. Like ready player me and Lifeform’s Avatar NFT can support users to edit appearance and image, and can be used across platforms. Like Lifeform’s Avatar NFT itself is an NFT on the chain, which can be directly compatible with the metaverse on the chain, and even off-chain meetings including Zoom , Google, etc. ensure the unity of identity. Afterwards, we can even look forward to a personalized metaverse, which will display more information about one’s own identity in a customized personal metaverse.
Although Avatar NFT is a more three-dimensional identity, but currently Avatars NFT shows more about appearance and appearance, it is just a single identity image, and does not include more behaviors or other information that define identity. Later, we can Expect Avatar NFT to display more information through metadata or composability.
c. Key attributes of DID
Composability of identities
In fact, DID can be more than an identity, just like our identity may consist of ID card, driver’s license, education, etc., a single certificate and product form may not be enough to describe our complete identity, but a combination of products applicable to different scenarios form our full identity. The difference is that the identity information under the chain cannot communicate with each other due to the fragmentation of different central communication systems. After the data is uploaded to the chain, it has fluidity and can support different arrangements and combinations, showing the user’s identity in a more three-dimensional image, such as imagining various games. The achievements of SBT can be displayed in the user’s personal Avatar NFT as a wearable medal, or the assets and transactions on the chain based on the wallet address can obtain lower interest in the lending agreement, which can include the composability of data sources , the composability of different application scenarios, and even the composability between different DIDs
Privacy and Security of Identity Data
At the same time, because the environment on the chain is publicly visible data, we need to pay attention to
Privacy: In the dark forest on the chain, it is very unsafe to disclose identities and related bound accounts and asset information, especially for the information on the chain that mainly focuses on financial transaction scenarios, exposing wallet addresses and transaction behaviors is very dangerous. Very dangerous, so DID privacy for associated asset information should be a necessity. At the same time, maintaining anonymity is one of the needs of many encryption-native users. At present, we have seen open source plug-ins such as semaphore and DIDs that provide privacy such as Firstbatch
Security: including information security and asset security. Information security mainly refers to the security of personal information, which may include information such as identity, address, and education background under the chain, as well as wallet addresses and transaction behaviors on the chain. It is possible to expose these information It brings about personal safety issues, and at the same time, the authorization behavior on the chain is often prone to the possibility of being hacked or maliciously attacked. Therefore, proper data processing and security must be ensured for the collection, storage, and use of personal information data. Although most project parties now save locally or use AWS, relying on the management capabilities of the team, the downtime of AWS and the endless problems of team management capabilities make us hope that these personal sensitive data can be stored in a more decentralized The modernized database guarantees the user’s data security
Censorship risk: mainly for the potential risks that may exist in centralized storage and management data. Although it is not a common risk of DID decentralized identity that we have seen, we still need to be reminded of possible censorship risks in the collection process
2. Why do we need DID
Everyone’s needs are different, because different preferences and backgrounds have been embodied in the choice of different financial products due to different risk preferences, different trading habits lead to the use of different trading platforms, different aesthetic standards, so choose to join different NFT community. For the project side, DID can help the team better understand the needs of users and design products. For users, a lot of market noise and dazzling products increase the difficulty of finding products that really meet their needs.
And DID may be the shortest path connecting products and users. To a certain extent, the major platforms of web2 have pushed to us at the fastest speed through the user portraits they have mastered, such as the products you may like, and the tweets that people nearby are watching. Reasons for not being able to leave these platforms. And DID may be the key to bringing the same experience, and more importantly, this is the Web3 where users truly have data sovereignty
a. DID Value
For DID, we believe the real potential lies in:
Possibility of data payment brought by data ownership
The attribution of data ownership means the option of data charging. When the data belongs to a centralized platform, it is up to the platform to choose how to realize the user behavior or personal preferences and other data generated on the platform. The purchase behavior infers the possibility of the user’s pregnancy and sells the news to the seller of maternity and baby products to accurately push advertisements to the user. The user becomes the product sold on the platform to obtain benefits, and we can use the products and services of the platform for free. In fact, it is Because our behavioral data is collected by the platform and generates income, which subsidizes the cost of the platform and even makes a profit.
When users have data sovereignty, users can get back the right to choose data transactions. You can choose to sell the relevant data, or you can choose not to sell. Different from the centralized platform as an intermediary connecting data producers and users and from it as a data porter to trade data value, we can even imagine a data market connecting data producers and consumers, such as providing a P2P transaction model, or DAPP directly subsidizes users to obtain user usage data and consumption habits, and a new business model for DAPP paying users emerges. These can be realized through user data and identities contained in DID, and this also depends on the chain we discuss below. Combination similar to Defi lego given by DID on
Composability brought by data on-chain
After the data is uploaded to the chain, the data begins to have liquidity, which can be read, used, and verified through the chain contract or API, and the process of data use or verification can be charged through the contract, just like reading and writing chainlink price Feed needs to be paid, and DID may propose a new data charging model for uploading user information to the chain. If DAPP wants to read or verify the personal information or transaction data contained in the user’s DID identity, it needs to be paid before it can be obtained. For example, Firstbatch’s SBT requires DAPP payment is required when the contract verifies the proof of interest
Moreover, the design of DID can even allow users to choose whether to agree to DAPP to read relevant information, or to selectively disclose personal information. For example, for Defi-related types, DAPP only chooses to display the wallets on a certain chain or the transaction records of one of the wallets. To choose the service of DAPP
More importantly, we may not need to have a large and complete identity on the same platform or dapp, but may have different DIDs in different scenarios, For example, in game scenarios, there are king status SBT, on the defi dapp, can be a mining OG or an onchain reputation of an arbitrage trading master, and published an NFT of a novel research master on the mirror. Just like people are multi-faceted, DIDs in different scenarios can show different aspects of an identity, and the composability of the chain allows different scenarios to obtain information about other identities of users to open new scenarios, or users can choose in different scenarios. Show different DIDs in different scenarios, choose to protect your identity while still being able to obtain products and services that meet your needs
b.DID Application Scenario
As identity data, DID mainly depends on how to use data or verify identity information. DAPP can use identity information to understand user needs and provide more personalized products or verify whether users meet the requirements of DAPP. The currently conceivable scenarios include:
Compliance requirements: CEX under the chain requires user KYC based on compliance and security considerations. There are also lending agreements on the chain that start to combine traditional financial KYC data under the chain to help better manage risks, mainly based on compliance KYC requirements such as regulation and risk control
Proof of Personhood authentication: The most common is the anti-sybil attack in whitelist and airdrop, that is, the same person can create multiple accounts or wallet addresses or get whitelist and airdrop. For the project side, this increases the cost of acquiring customers, because these rights received by the same user can originally obtain other new users, so for the project side, there is a need to verify the proof of personality of the user
User portrait: This is more similar to the understanding and use of DID in our usual discussions. In the Web2 world we are familiar with, a large amount of personal information and behavioral activities are collected, sorted, and extracted by centralized companies to accurately push content and advertisements for each user, and personalized content will also increase. User stickiness to the platform. This is what we think one of the greatest potentials of DID is that DID can be used to design, recommend, and adjust content for users, including social scenarios and transaction scenarios
Social scene: Although the current data on the chain is mainly transaction data, we believe that after EIP4844 has greatly reduced the storage cost on the chain, coupled with the massive data storage, retrieval, and analysis projects we have seen. After the launch of the project, we can see data-intensive social projects at the application layer, and provide targeted services to users through DID and other messages, providing web2 user experience. There may be different forms in different tracks:
DAO: The topic that was often discussed before was onchain reputation. For DAO members, onchain reputation is one of the options to reflect the degree of member contribution. However, since the working scenarios of DAO are not limited to the chain, a large amount of communication and work results, such as snapshot voting, community proposals, offline activities, etc., all appear in off-chain scenarios, and VC may be used to prove off-chain academic qualifications, work experience etc.
Credit lending: As one of the most widely discussed scenarios of DID, credit lending is a very common scenario in traditional finance. The essence of Huabei and Jiebei we are familiar with is that Alipay collects user asset information and behavior data The credit loan provided by the identity information of DID, and the user information provided by DID can also support more lending agreements to provide liquidity, and we have also seen that some agreements have begun to provide credit loans that are not fully mortgaged
3. Web3 Identity Stack
The Web3 identity stack can be divided into six layers from bottom to top: Storage layer-identification layer-private key management layer-authentication layer-authorization layer-proof layer. The storage layer and identity layer are the infrastructures, that define the DID standard. Large-scale user interaction starts from the private key management layer:
To obtain a DID, the user needs to own a private key management account (account). The form of the web3 private key management account is usually a wallet, which is a natural identity information container.
After any authentication (Seed phrases/MPC login/biometrics), the user successfully logs in to the wallet
Different Dapps can now ask for permission to connect to wallets and read information about the account (ex: multi-chain addresses, transactions, on-chain data, and NFT assets) after obtaining the authorized signature.
Finally, all kinds of VC\SBT\Poap, etc. are generated and stored in the wallet to prove the user’s identity.
When interacting with Dapps, the user can independently authorize which data to disclose to the project.
Ideally, ZK technology can be used in the above links to hide the direct connection between the user’s wallet address and identity asset information.
a. Agents&Key management
The wallet provides a natural identity container, which is an entrance connecting Dapps and credentials held by users.
What should an ideal “DID wallet” look like: Aggregates the addresses of all chains, and integrates the fragmented data of users while having basic functions such as signatures, transfers, and other transactions; secondly, it can display various SBT/VC/PoP certificates owned by users. When Dapps interacts with the wallet, the user can independently authorize which data to disclose, thereby helping the user maintain data sovereignty.
1) Smart Contract Wallet
Currently, most wallets such as Metamask do not have these functions. An important reason is that they are all EOA wallets, which only support the most native operations such as query and transfer. In the future smart Contract wallets (eg: Unipass, Argent) are expected to realize more diverse functions, such as:
No private key: users no longer need to keep seed phrases or private keys; multiple verification methods such as biometric verification and device verification can be adopted.
Account recovery: Account recovery can be performed through biometrics, social verification, etc. to ensure that social identities will not be lost
Gasless interaction: users can use ERC-20 tokens involved in the transaction for gas payment, or directly specify a fixed account for payment without preparing ETH as gas in advance
On-chain credit lending: The account contains a complete on-chain credit record so the account itself can directly get a loan based on its reputation, without any collaterals, boosting the financial liquidity in the market; what needs to be further consideration is how the asset lender can properly punish dishonest behavior.
Sub-account management: Users use dedicated account systems for different scenarios and have a more comprehensive account management system. For example, one account only stores ETH as a gas account, and the interaction of all other accounts could be paid by the gas account; One account only stores blue-chip NFT, which will not be easily used; One account is used as a gamefi account, they could store different asset as well as storing the on-chain behavior data as separate entities, thereby preserving user privacy to the largest extend.
2) Identity Wallet
The main function of the smart contract wallet is to store and manage Crypto keys for sending/receiving assets and signing transactions; another type of identity wallet is dedicated to storing identities and allows users to make claims, which could be displayed across applications/platforms.
Polygon ID Wallet: Polygon has launched a wallet for its users to manage and store PolygonID, which provides functions such as log-in, zkp generation, and privacy verification; currently there are few usescases, and it encourages developers to customize use cases
ONTO wallet: it is designed to help users create DID, and fully protect user privacy through encryption algorithms, integrating on-chain + off-chain identities, NFT, asset management, etc;
Nugget: Mainly focus on e-commerce payment scenarios, use biometric technology to scan users’ faces from multiple angles, and combine ID card scanning with optical character recognition technology to complete the KYC identity verification process and zero-knowledge storage on the chain.
b. Authentication layer
To attract users to use web3 DID on a large scale, a more user-friendly, low-threshold, and secure authentication method would be essential.
Sign-In with Ethereum
Sign-In with Ethereum (SIWE) is an authentication standard pioneered by Spruce, ENS, and the Ethereum Foundation. SIWE standardized a message format (similar to jwt) for users to use blockchain-based account login services. On this basis, Sign-In with X (CAIP-122) makes SIWE an implementation of SIWx centered on Ethereum, and generalizes the standard to operate across blockchains.
Unipass
Unipss has successfully developed an on-chain solution for mailbox login and deployed zk to hide the relationship between an email account and a wallet address. In contrast, web3auth’s mailbox login solution is not more centralized than the on-chain structure, and its private key is stored in the front-end storage of the browser, which poses concerns for account security.
Hexlink
As an identity oracle, Hexlink encrypts the user’s identity data and transmits it to the identity server. The server decrypts the data and constructs a merkle proof of zero-knowledge proof to verify the user’s identity. It can be compatible with both web and mobile applications and supports web2 authentication. Social accounts and web3 EOA accounts and AA abstract wallets provide a zero-threshold web3 account experience
Notebook
User identity KYC + login solution, after registering a notebook account and completing the verification of biometric information, zkp can be generated to prove the user’s identity. Recently, it is cooperating with Near for Notebook Auth integration.
c. Access control & Authorization
Authentication solutions help confirm the identity of the user, while access control solutions determine which resources an entity should be able to access and what they are allowed to do with those resources.
1) Access Control Management
The community can programmatically grant access rights based on the visitor’s Token holdings, on-chain activity, or social verification, instead of manually assigning access rights.
Lit
Based on the MPC key management and access control protocol, the public/private key pair is represented by a PKP (programmable key pair) NFT. When the specified conditions are met, the owner of the PKP can trigger the aggregation of the network, so that they can identify to decrypt documents or sign messages. Potential usecase: Token-gated meeting and Gathertown spaces, live streaming, and Google Drive access.
Collab.land
Discord automates the management of bots and manages membership based on token ownership.
2) User authorization management
When interacting with Dapps, users should also be able to independently authorize which data to disclose, and manage permissions of each Dapp through a unified interface.
EverRise wallet
EverRise wallet launched a new product– EverRevoke to help users manage authorizations. EverRevoke aggregates the token & NFT authorization status of 5 blockchains. Users can manage and revoke their token permissions at any time.
The authorization management is expected to be further improved in AA account. Developers can define different read-write and asset permissions for each private keys, or set the minimum transaction threshold and automatic trigger conditions for transactions.
d. Attestation
Attestation solutions can help wallet addresses to produce their “proof”, “reputation” and “credentials”. Based on verifiable on-chain data, this reputation is not limited to a certain platform. We believe that the attestation layer is the closest to crypto users, thereby sustainably generating valuable data. It has the most potential to become a unified DID layer.
1) Data attestations
The biggest feature of the data attestation protocol is that it can attract users to generate new data. With the tractions it gains from user data, it can naturally evolve into a universal identity standard.
Galxe
Galxe ID labels each address by issuing certificates and integrates user data on different chains. Data sources range from Web2 and Web3; there are currently more than 4.2 million Galxe ID users.
In 2023 H1, Galxe will release its new product: Galxe Protocol, a license-free data protocol product. Developers are able to access the data generated by Galxe and start to build applications on its ecosystem.
Galxe is planning to launch a standard system for attestations, including storage modules, verification modules, usage modules, and privacy management.
Lens Protocol — Social Gardens Emerge
Lens Protocol is a decentralized social graph protocol built on Polygon, launched by the founding team of Aave. Regarding the goal of betting on Web3 social media, Aave founder Stani has publicly stated that the ultimate goal is to combine Web3 social media and DeFi, turning the social graph into a trust graph, and providing low-payment loans through Aave.
Lens has passed the hackathon LFGrow and two rounds of donation plans so far, with a total of more than 100,000 users, with many innovative projects including Lenster, Phaver, Orb, SteamDAO, etc.
Farcaster — Decentralized Trusted Neutral Social Protocol
An open social protocol that supports decentralized clients. Farcaster adopts an on-chain + off-chain hybrid architecture, in which identities are stored on the Ethereum, and Ethereum is used to ensure its security, composability, and consistency.
Identity is controlled through Ethereum addresses, and off-chain messages are signed through Ethereum accounts. The user’s data is encrypted and signed by identity and stored on the server controlled by the user (Farcaster Hubs). The reason why the data is not stored on the chain is that the settlement cost on most L1 and L2 networks are too high and the speed needs to be faster.
Nostr-an information relay transmission protocol banned by Twitter
The full name of Nostr is “Notes and Other Stuff Transmitted by Relays”, a relay transmission protocol for social media information. Nostr was established in November 2020. As a general-purpose Internet infrastructure, it is still in its early stages.
Nostr is divided into two components: clients and relayers. The client is used to sign and verify the information and is run by the user; the repeater is responsible for delivering messages and can be run by anyone setting up a server. The client stores the user’s key internally. Each message must be signed and sent to the relay. The relay does not change the data. The verification of the authenticity of these messages is done by the client, so the user does not need to trust the relay, more in line with the spirit of decentralization.
Nostr originated from the BTC community and has a close relationship with the web3 community. In the future, token incentives may be released for storage. In terms of marketing, Jack Dorsey carried the banner, but some time ago it was officially banned by Twitter.
2) Domain Name Service
Both the domain name and the wallet can be regarded as identity information containers: the wallet can use a domain name as a substitute for the wallet account name and use it as the “name” when interacting with the application side, and the domain name can integrate multiple chain addresses or even multiple wallets account, which is also a natural identity aggregator.
ENS
With 1.8 million registrations, it is working with SpruceID to advance EIP-4361: Sign In With Ethereum.
If the proposal is successfully implemented, this will replace the function of Connect Wallet, allowing the domain name to become the entrance to Web3 above the wallet address. In addition, ENS also hopes to complete its vision of “Web3 name” through the integration of a series of identities in the domain name.
Space ID
Space ID: Provides registration services for domain names with .bnb suffixes. Space ID also hopes to link .bnb domain names with users’ multiple on-chain addresses, Twitter, and other Web2 accounts, and become a Web3 Universal Domain.
3) 3D Visual Identity
People are always pursuing experience upgrading, we can reasonably assume that we will gradually see the evolution from 2D identity to 3D identity. The immersive experience and playability of Metaverse will be much better than web page interaction.
Philand
Users can visualize the behavior on the chain through Phi, and receive corresponding components based on the behavior on the chain (donation, protocol interaction, etc.), building up their reputation world like Lego blocks. Users that owns ENS domain names can automatically generate land, and combine their web3 worlds according to their onchain behavior, and their social networks.
Phi Previously won the hackathon NFT HACK2022 and BuildQuest in in ETH Global. It also received a grant from Uniswap, a grand winner for lens hack.
Lifeform-3D visualization DID
Lifeform is a 3D digital identity solution provider that has received investment from Binance’s seed round, focusing on the development of integrated solutions for visual DID. Core products include a 3D hyper-realistic virtual human editor, visual DID protocol, secure smart contract suite, native decentralized identity SaaS system service, and metaverse underlying engine suitable for Web3 cross-application development.
4) Other Attestations
Unirep
Unirep is an undeniable reputation protocol built on Ethereum. Users are allowed to anonymously give positive or negative reputations to others, and at the same time cannot refuse to accept the reputation (non-repudiable), and can voluntarily prove that they have a certain reputation through zk technology, but do not disclose the specific amount. Such solution can also be abstracted into smart contracts, using the composability of blockchain to provide encryption schemes for other project parties.
Firstbatch
Use AI to analyze web2 data and formulate data labels, verify the user’s interest while ensuring user privacy through ZK . Its uses cases include1. Content recommendation 2. Offline activities 3. Permission activities.
Aspect AI
The Linkedin for web3 builders. It uses some AI algorithms to process, classify, and label Github user data to generate user portraits for each Github user. Developer identities may have more utilities than general-purpose identities, including online job hunting, code contribution management, offline hackathons, developer communities, etc.
e. Privacy
We cannot discuss identity infrastructure without considering the technical primitives for privacy,because privacy is important at all layers of the identity stack. Over the past decade, blockchain adoption has accelerated the development of cryptographic primitives such as zk-proof.
Iden3
The zk-native identity protocol, provides a zk framework and open-source libraries for zk identity primitives, authentication, and proof-of-claims generation. The protocol uses Baby JubjubElliptic curves, which generate key pairs for each identity, are designed to work efficiently with zk-SNARKs, which are used to prove identity ownership and claims in a privacy-preserving manner.PolygonIDis currently leveraging this protocol to build its identity wallet
Polyhedra
The zk full-stack protocol, and its cross-chain bridge zkbridge can solve the problem of multichain identity management. Polyhedra has launched the zkbridge relay network + two-layer recursive proof, ensuring the security of the cross-chain bridge while reducing time and gas fee. It also developed a DID container for the Gamefi projects, tp package players’ assets under one nft and transfer it with one click.In the future, it is planned to make user interaction simple or even insensitive.
Semaphore
The zero protocol for developers in Ethereum. Users can prove their group membership and send signals such as votes or support without revealing their original identity. Semaphore is not a user-facing application, but aims to provide powerful and simple tools for Ethereum developers and build DApps.
Application-level zkp has also received much attention:
Private Airdrop:Stealthdrop
Anonymous communication:heyanon
Vote anonymously:Melo
KYC： Zkpass， Outdid
4. Identity will be the next entry point for web3
Take a look at the development of Web2 portals. It evolves from portals — search engines — PC apps — mobile apps.It’s clear that user are transferring from single-function, passive, complex to comprehensive portal to active, simple onboarding tools.Driven by humanity, users will always tend to choose a one-stop integrated entrances as touchpoint to explore crypto world.
We optimistically predict that this traffic portal will have the following characteristics:
Universal identity: A unified and interoperable identity layer which portraits all user interactions onchain
Intergrated frontend: We believe that one or several super account systems similar to WeChat will emerge, and the most reasonable form of such system is the wallet
Decentralized backend: Relying on the composability of the blockchain, the back end of the wallet can integrate various protocols such as social/game/Defi/identity/payment for safe use by users
Privacy protection: Multiple privacy middleware should be combined to provide powerful end-to-end communication encryption, identity authorization and personal information protection.
Diversed security settings: With the development of zk and AA, better security mechanisms can be invented and put to practice; there should be various key management mechanisms (MPC/multi-signature/no mnemonic) for users to choose from, meeting the needs of different types of customers
User-owned data: Personal information/social data/identity credentials are stored in decentralized storage solutions such as Arweave or IPFS, and are only controlled by the user’s own key.
Native Commercialization: Support native web3 payment, simplified cross-chain interaction and gas fee payment.
Anti-censorship: Users will no longer banned by any centralized institutions like Meta or local governments.
About Foresight Ventures
Foresight Ventures is dedicated to backing the disruptive innovation of blockchain for the next few decades. We manage multiple funds: a VC fund, an actively-managed secondary fund, a multi-strategy FOF, and a private market secondary fund, with AUM exceeding $400 million. Foresight Ventures adheres to the belief of “Unique, Independent, Aggressive, Long-Term mindset” and provides extensive support for portfolio companies within a growing ecosystem. Our team is composed of veterans from top financial and technology companies like Sequoia Capital, CICC, Google, Bitmain and many others.
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