ID

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.”

“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.

“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.

Related: Decentralized finance to be examined at inaugural CFTC tech advisory meeting

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.

Equifax, known for huge data breach, is building a Web3 KYC solution

Equifax, which suffered a huge data breach in 2017, has partnered with privacy-centric blockchain company Oasis Labs for a decentralized ID offering for Web3 companies.

Credit reporting company Equifax, known for suffering from one of the largest customer data breaches to date, has partnered with blockchain company Oasis Labs to build a Know Your Customer (KYC) solution.

Equifax and Oasis said on Oct. 26 that the latter would be building a decentralized identity management and KYC solution for the industry on Oasis’ platform, which will leverage application programming interfaces (APIs) from Equifax to help with checks and user identification.

The announcement made no mention of the exact technology which will underpin this offering and Cointelegraph’s request for comment was not immediately responded to by either company.

Both firms believe there hasn’t been a KYC solution tailored to Web3 with “strong privacy protection” and their proposed offering is set to address this gap by issuing anonymized KYC credentials to individuals’ wallets.

This credential will be continuously updated according to the announcement and Oasis pledges its “privacy-preserving capabilities” will ensure data is processed in confidence while maintaining a trail on the company’s blockchain.

Web3 firms offering similar solutions based around decentralized identity are Dock and Quadrata with each offering a product built around decentralized identity.

The partnership could have some Web3 natives concerned, considering the significant data breach Equifax suffered in 2017. Around 163 million worldwide private records were compromised, with 148 million being U.S. citizens making it the 13th largest data breach in United States history, according to cybersecurity company UpGuard.

Related: Zero-knowledge KYC could solve the privacy vs compliance conundrum — VC partner

Attackers targeted a third-party web portal with a known vulnerability that was patched, but Equifax had failed to update to the latest version. The hackers gained access to the firms’ servers for around two and a half months, all the while siphoning millions of records containing sensitive information.

It was reported that Equifax spent $1.4 billion on legal fees and strengthening its security posture following the incident. The U.S. Federal Trade Commission and Consumer Financial Protection Bureau issued a $700 million fine in July 2019, which the firm settled.