decentralized identification

Polygon launches decentralized ID product powered by ZK proofs

The public launch of Polygon ID comes 12 months after it was first launched in a closed-environment to a select group of builders.

Polygon, a layer-2 scaling protocol for Ethereum, has launched a zero-knowledge decentralized identity solutionto the public nearly a year after announcing its development.

The Polygon ID service uses zero-knowledge proofs (ZK proofs) that use cryptographic techniques to allow users to verify their identity online without having their sensitive information passed or potentially stored with a third party.

Polygon Labs publicly released Polygon ID on March 1, almost 12 months after the project was officially launched in a closed-source environment.

The Polygon team says Polygon ID was built to “solve the issue of digital trust.”

ZERO KNOWLEDGE IDENTITY FOR WEB3

The Polygon ID team is excited to announce 4 tools have been released in the #PolygonID Identity Infrastructure to build a more equitable internet that places identity at the center of it.

The future is self-sovereign⛓https://t.co/h66KyDurJE pic.twitter.com/jTBbzBNVJk

— Polygon (@0xPolygon) March 1, 2023

“What sets Polygon ID apart from most other decentralized ID frameworks is its implementation of zero-knowledge technology, allowing users to verify their identities or other credentials without necessarily revealing sensitive information,” Polygon said.

The public release introduces four new tools to the Polygon ID toolset — Verifier SDK, Issuer Node, Wallet SDK and Wallet App — that will allow Polygon developers to integrate decentralized identity into their applications.

*A simple chart explaining how Polygon ID interacts with user credentials. Source: Polygon*

Users will be able to produce zero-knowledge proofs using off-chain credentials — such as their passport, national ID or a bachelor’s degree — to interact with smart contracts and verify information on-chain.

“This means that off-chain data can now be used for trustless on-chain verifications in the widely-supported Verified Credential format.”

Polygon claims it’s also the first ZK-based digital ID tool that allows users to hold credentials locally on handheld devices such as smartphones, and that users will no longer need passwords:

“Passwordless logins exchange encrypted verifiable credentials by simply scanning a QR code or connecting to a desktop wallet. Organizations can benefit from improved security, a better user experience, and productivity of their system administrators whose time is not taken up by password resets.”

The co-founder of Polygon ID, David Schwartz, said in a March 1 tweet that the product was built “on the latest decentralized identity standards” which will help protect developers and users against unauthorized access from third parties.

Polygon ID’s ZK-based technology enables developers to build solutions to allow users to store their personal information privately and securely while giving them full control over who has access to their data.

— David Schwartz (@davidsrz) March 1, 2023

“Providing identity in a way that the average consumer can use is the holy grail of digital ID adoption,” he explained in a separate press statement.

Multiple projects have already committed to integrating Polygon ID upon launch, such as Web3 infrastructure provider Kaleido, ID verification solution Fractal and Web3 community management system Collab.Land. Together they have a user base of over 4 million, according to Polygon.

Other Web3 projects, such as metaverse platform The Sandbox and blockchain builder community Guild.xyz, are in the process of integrating Polygon ID too.

Following the news, the price of Polygon’s native token, MATIC (MATIC), increased 2.5% from $1.22 to $1.25 in a matter of hours before falling back to $1.23.

Other blockchain-based ID products out in the space today include Quadrata and IDNTTY.

Koreans to have access to blockchain-powered digital IDs by 2024

Under the plan, the blockchain-powered ID would be fully decentralized, meaning the government won’t be able to see how or when the ID is being used.

South Koreans could soon allow its citizens to use blockchain-based digital identification (ID) instead of physical cards as soon as 2024, as the nation further embraces blockchain technology.

According to an Oct. 17 report from Bloomberg, a plan from the government will see digital IDs embedded as an app within mobile devices in the future, working in a similar fashion to physical resident registration cards.

The digital IDs are expected to launch in 2024, with around 45 million citizens expected to adopt the technology within two years.

An economist at Korea’s Science and Technology Policy Institute Hwang Seogwon said the digital IDs could be used in finance, healthcare, taxes and transportation, while the director-general of Korea’s Digital Government Bureau Suh Bo Ram said the technology could help businesses that haven’t yet transitioned fully online.

The plan would also see the government adopt a decentralized identity system, meaning the government will not have access to information stored on phones, including the digital ID being used, how they’re used and where, according to Suh.

Such technology isn’t new to the tech-savvy nation, which ranks first among all nations in applying technology to life, business and government, according to the Portulans Institute, an American think-tank.

It also wouldn’t be the first blockchain-based digital ID solution put into effect in the country either.

In Aug. 2020, over one million South Koreans had implemented a blockchain-powered driver’s licence, which operates via Korea’s PASS smartphone application.

Shortly after, in September 2020, a South Korean government agency — Korea Internet & Security Agency (KISA) — began pilot testing on a similar system.

While South Korea is seen leading the way in all things blockchain and Metaverse, other nations are expected to soon follow.

A Jun. 2021 study from market research firm ReportLinker estimates that the blockchain identity market will grow a further $3.58 billion by 2025 — a compounded annual growth rate of 71%.

However, Brenda Gentry, blockchain adviser and CEO of Bundlesbets.com, recently told Cointelegraph that no matter how capable and decentralized the ID management system is, it’ll still require recognition from government authorities or corporations:

“If the issuing authorities don’t recognize the validity of the blockchain IDs, then the same cannot be used for availing a majority of public services. This in my opinion is the biggest limitation.”

Decentralized ID the key to mainstream DeFi adoption—Quadrata co-founder

Decentralized identities would open Web3 to a range of services requiring personal information and allow platforms to offer tailored products, according to the CEO of Quadrata.

Decentralized identity (DID) and compliance services will become a “key infrastructure” to the success of decentralized finance (DeFi) and the transition of real world financial assets onto the blockchain according to Fabrice Cheng, CEO and co-founder of Quadrata.

Speaking with Cointelegraph, Cheng said the key driver behind the demand for DID will come from Web3 protocols, which will utilize the DID of users to build better products that are “catered” to existing customers and also “targets new sets of customers.”

Quadrata provides a Web3 identity solution which allows users to perform KYC compliance without sharing personal data, it recently partnered with Ethereum Layer-2 scaling solution Polygon to integrate its Web3 Passport Network.

DID refers to a self-owned, independent proof of identity which could be used to access services requiring such information at the discretion of the user. Personally identifiable information such as a user’s name, age, or ID document number would be anonymized with services only seeing that a user’s DID was verified by a trusted party.

The proof of identity issued varies from protocol to protocol, but Quadrata’s solution, the Quadrata Passport, is represented in the form of a non-transferable nonfungible token (NFT).

Web3 users will need to fill out basic Know Your Customer (KYC) information as part of the on-boarding process, once that’s done, they won’t have to do it again as it’ll be universally recognized on-chain, according to Cheng.

Cheng also said that much like traditional businesses, Web3 companies will need to analyze their customers to gain a competitive advantage:

“When we go to Amazon, the first thing that we’re going to look at is the reputation of an item, the reviews, and the ratings. So we’re already accustomed to those things where you rely on some sort of reputation and trust.”

“Similar things will happen with Web3,” he added.

Cheng said DeFi was the biggest potential use case for DID as more “real world assets” and institutional capital will move on-chain if they’re accompanied by an “identity or reputations solution.”

Cheng added once DID becomes widely adopted, “it will send a clear message to the entire space that blockchain is a great technology for financial services.”

As for why Web3 users would be incentivized to complete KYC information, Cheng stated while it is not necessary now, some users may be barred from accessing protocols which require KYC:

“If you start seeing a product that offers you better parameters, because you can borrow more with less, or you can potentially access or unlock and secure loans, then suddenly, you start having an incentive to use those [KYC] products, because they are better.”

Cheng noted a key advantage that DID has over traditional identity solutions is the need to only fill out KYC once.

“You KYC on Coinbase and you go to Binance and have to KYC again,” he explained, “then you go to the Bank of America, KYC again. It’s just a lose-lose situation, because [both] the company […] and customers hate doing that.”

However, Cheng stated that Quadrata and its competitors will be faced with the tough ethical dilemma in deciding where to draw the line between providing Web3 companies with key identity data and preserving user anonymity.

Before a DID solution takes full effect, Cheng noted that Web3 wallet infrastructure needs to improve to a point where both retail and institutional users can navigate a wallet and feel comfortable obtaining custody over their funds.

“Hopefully in one or two cycles, we’ll get there,” he added.

Decentralized ID the key to mainstream DeFi adoption — Quadrata co-founder

Decentralized identities would open Web3 to a range of services requiring personal information and allow platforms to offer tailored products, according to the CEO of Quadrata.

Decentralized identity (DID) and compliance services will become a “key infrastructure” to the success of decentralized finance (DeFi) and the transition of real-world financial assets onto the blockchain according to Fabrice Cheng, CEO and co-founder of Quadrata.

Quadrata provides a Web3 identity solution that allows users to perform Know Your Customer (KYC) compliance without sharing personal data, it recently partnered with Ethereum layer-2 scaling solution Polygon to integrate its Web3 Passport Network.

The term “DID” refers to a self-owned, independent proof of identity that could be used to access services requiring such information at the discretion of the user. Personally identifiable information such as a user’s name, age or ID document number would be anonymized with services only seeing that a user’s DID was verified by a trusted party.

The proof of identity issued varies from protocol to protocol, but Quadrata’s solution, the Quadrata Passport, is represented in the form of a non-transferable nonfungible token (NFT).

Web3 users will need to fill out basic KYC information as part of the onboarding process. Once that’s done, they won’t have to do it again as it’ll be universally recognized on-chain, according to Cheng.

Cheng also said that much like traditional businesses, Web3 companies will need to analyze their customers to gain a competitive advantage:

“When we go to Amazon, the first thing that we’re going to look at is the reputation of an item, the reviews, and the ratings. So we’re already accustomed to those things where you rely on some sort of reputation and trust.”

“Similar things will happen with Web3,” he added.

Cheng said DeFi was the biggest potential use case for DID, as more “real world assets” and institutional capital will move on-chain if they’re accompanied by an “identity or reputations solution.”

Cheng added that once DID becomes widely adopted, “It will send a clear message to the entire space that blockchain is a great technology for financial services.”

As for why Web3 users would be incentivized to complete KYC information, Cheng stated that while it is not necessary now, some users may be barred from accessing protocols that require KYC:

“If you start seeing a product that offers you better parameters, because you can borrow more with less, or you can potentially access or unlock and secure loans, then suddenly, you start having an incentive to use those [KYC] products, because they are better.”

Cheng noted a key advantage that DID has over traditional identity solutions is the need to only fill out KYC once.

“You KYC on Coinbase and you go to Binance and have to KYC again,” he explained. “Then you go to the Bank of America, KYC again. It’s just a lose-lose situation, because [both] the company […] and customers hate doing that.”

“Hopefully in one or two cycles, we’ll get there,” he added.