Unlocking Blockchain’s Potential: The Role of On-Chain Attestations

Graeme Moore, Head of Tokenization at the Polymesh Association, sheds light on the transformative potential of on-chain attestations in unlocking the most valuable use cases of blockchain technology. The views expressed are his own and do not necessarily represent those of Decrypt.

In the Web2 world, identity verification is normalized, but it’s yet to become a reality in Web3. With regulators globally passing virtual asset legislation, on-chain Know Your Customer (KYC) is becoming a regulatory inevitability. KYC, a staple in the financial industry, verifies individual identities, offering protection against rogue bots that can exploit blockchain ecosystems.

However, the decentralized finance (DeFi) sector requires more than just proof of being human. The lack of enforceable regulation in DeFi leaves room for exploitation, necessitating proof of trust intertwined with verified user identity. Traditional KYC methods fall short in attesting to an identity’s trustworthiness unless explicitly listed on a sanction list.

This gap in trust verification hinders the realization of blockchain’s most valuable use cases, such as decentralized voting. Steve Dakh, Ethereum founding member, is addressing this issue by developing the Ethereum Attestation Service (EAS), allowing any entity to make attestations on the ledger about anything, providing a relative idea of trust.

Attestations are claims about one identity, usually made by another, that can be independently verified. They refer to identifiers like legal names and addresses and can be tied to on-chain identifiers like decentralized identifiers (DIDs) or wallets. The value of attestations is relative to the receiver’s trust in the entities making them, allowing smart contracts to interact with entities possessing certain attestations.

This flexibility in trust allows for a myriad of use-cases, from government-backed attestations in voting to disparate authorities in intellectual property. Combined with zero-knowledge proofs, attestations enable entities to prove facets of identity information without revealing the entire contents, allowing individuals to verify different aspects of their identity as required for compliance.

On-chain attestations can be made for practically anything, enabling more meaningful large-scale interactions. They can represent traditional attestations like birthdays or accredited investor status, or more qualitative aspects like music taste or employment history. This modularity empowers participants to decide which entities they trust and how quantitative or qualitative they want this trust to be.

Protocols like EAS represent interactions between identities and reputation on-chain and make them interoperable between platforms. Solutions like Intuition are experimenting with peer-to-peer identity models leveraging these protocols to create actual relative identity data.

In conclusion, on-chain attestations are pivotal in bridging the trust gap in the blockchain, allowing for a more flexible and modular approach to identity verification and interaction. While the infrastructure is still in its infancy, the advancements in on-chain attestations are steering blockchain technology towards a future where decentralized finance and other valuable use cases can truly take off.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Bullish Times is a marketing agency committed to providing corporate-grade press coverage and shall not be liable for any loss or damage arising from reliance on this information. Readers should perform their own research and due diligence before engaging in any financial activities.