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DID: The Thirst for Credit and Permissionless

22-11-24 18:35

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Original title: "DID: The Thirst for Credit and Permissionless"

Original source: R3PO

Decentralized link built by DID and data on the chain issued last week In the article "a>", R3PO pointed out that the data on the chain is a kind of "sinking" data infrastructure, which needs to be embedded into SocialFi, GameFi, wallet and other products with DID as a functional suite, and focuses on the analysis of ENS Domain names represent the great significance to individuals in the Web 3.0 era.

In R3PO’s view, there is still a lack of observation on the direction of data application on the chain. The more traditional breakthrough of the blockchain lies in the comprehensive opening of data, but this does not mean the equality of "data access rights". Due to the limitations of funds and skills, data products are on the road to commercialization and exclude most users. The point of no return, creating a new pattern of inequality.

This de facto inequality will lead to the evaluation and control of the majority by the minority, At the same time, personal data is scattered in different public chains, DApps, and products, and it is impossible for individuals to add, delete, modify, and query data. Overlay addresses and domain names can change from time to time, and personal identities are gradually fluidized and fragmented in the world on the chain.

From the perspective of truly empowering individuals, R3PO believes that Starting from a unified perspective, data ownership and access rights are returned to users, thereby creating a credit-based decentralized social system.

The credit system is the cornerstone of social frictionless operation, giving everyone the opportunity to obtain equal dignity and happiness possibility.

Web 3 Personal Identity: Proving Asset Ownership

Personal identity is a prerequisite for the popularization of Web 3 products in the future, and the construction of data-precipitated identity provides a way for decentralized verification.

Take Bitcoin as an example, the data structure on it is essentially a hash pointer combined with a binary tree The Merkle tree derived from the variant of Merkle tree, the data itself is the account book, and the account book itself is the record of personal activities on the chain, from the creation of the Genesis block, to the hash collision of miners competing for the right to bookkeeping, and then to Transaction information transaction (Tx) between individuals, these data constitute the blockchain itself.

However, R3PO believes that this kind of data stacking not only brings decentralization, but also brings Another problem that has plagued us so far is the anxiety of losing identity. The account system based on public and private keys actually lacks an effective way to bind individuals to the chain. Once the mnemonic or private key is lost, how to prove that you are you, How to prove your assets are yours will never be realized.

In order to solve the identity loss, the wallet solution and the data analysis on the chain try to block from both ends , after eliminating all impossible answers, there is only one truth.

Specifically, the wallet solution provides an identity container, in MPC (Multi-Party Computation) and account abstraction, social recovery allows personal identity and other relationships to be connected in one place; and on-chain data analysis directly reverses the relationship between on-chain addresses and social entities through AI and behavioral analysis, such as After the FTX hacking incident, the identity of the hacker could not be determined, but his behavior was tracked in real time by tools such as Nansen.

However, the problem has not been completely solved, and the wallet solution cannot solve the interaction problem between individuals, especially It is in the field of strangers or public communication that DID, SBT and SocialFi need to accumulate more personal data in order to truly play a role in data endorsement of identity.

Just like Twitter’s Blue V authentication mechanism, centralized auditing can ensure personal identity be fraudulently used, and in a decentralized society, only enough data can have the effect of confirming rights.

The biggest problem with on-chain data analysis is that it is relatively difficult to track the addresses of giant whales and institutions It is effective, but it cannot identify a large number of individual retail investors. At most, the account behavior can be inferred through data, and then tagged. For example, OKlink has collected 200 million physical tags, and Nansen has collected mainstream CEX cold wallets in the currency circle.

But labels are not identities, multi-dimensional labels can constitute a personal body, personal identity is unique to an individual In the SBT theory, the "chain assets" and social assets bearers are also based on "uniqueness". Individuals cannot sell themselves, but only various personal assets, such as labor and time.

< blockquote style="text-align: center;">Image description: Blockchain data layering

Image source: R3PO

R3PO believes that, as shown in the figure above, in the data hierarchy of the blockchain, the bottom layer that really calibrates personal identity The data layer, whose structure, storage and circulation are on the public chain, is equally open to everyone. Alice's address can be tracked by Bob in real time, and Bob cannot reverse track without telling Alice's personal address.

From the browser layer, personal data will usher in the unequal storage and access, In turn, personal identities are used by others, but individuals cannot share their profits. For example, Nansen's high subscription fee does not need to share profits with the addresses it collects, and individual users become "digital labor" on the data platform.

In user-created data products such as Dune and Footprint, the right to query data is open to individuals, However, its profit model has never been able to run smoothly. It has users but lost profits. The commercialization process is unsustainable, and the high user stickiness cannot be monetized. Governance tokens such as Uni cannot capture the value of the agreement. Token economics basically is invalid.

From this dimension, blockchain data products are creating new problems, and its acquisition The way to profit must be based on the advantage of information asymmetry brought about by the exclusion of the majority. This is obviously not a product that users need in the Web 3.0 era. The way to break the game lies in the combination of personal identity attributes such as DID and SBT, allowing personal data to return Only in the hands of individuals can the profit flywheel of data products be activated.

For example, in SocialFi’s Token economics model, personal data is emphasized without exception No social protocol can take data and profits away from individuals.

Equal DID is the only way to eradicate data access inequality

R3PO believes that the inequality created at the level of data acquisition cannot become the basis of the future Web 3.0. First of all, it must be admitted that decentralization means equality, which is a relatively rare concept in previous discussions on privacy and freedom. The value of such unequal access rights is not universally recognized.

The process of personal identity transfer in Web 2 is: centralized verification--account distribution- -Mutual recognition of account systems between products--account binding. In this process, the centralized verification of the starting point and the mutual recognition between accounts are the most fatal shortcomings, which indicates that we cannot truly control our own data.

Taking traditional credit products as an example, its core is risk control and credit rating measures, the former controls loss, the latter earns the expected profit.

In this process, the biggest problem is still that individuals need one-way disclosure of personal data to obtain The data and privacy security caused by financial support has long been criticized by people, and it is impossible for companies to disclose the data they acquire in commercial competition, resulting in a zero-sum game between personal privacy and corporate disclosure. Lose-lose situation.

When it is impossible to find out the actual operating conditions of enterprises one by one, banks will stop issuing loans in order to preserve profits, which may cause business difficulties in light cases, or lead to economic crisis in severe cases.

Image description: SSO diagram

Image source: bytebytego.com

And Web 3.0 provides another possibility. After the credit system based on personal data is successfully established, unsecured lending will only be a basic operation, and market liquidity will be based on credit As the basis for pricing, bringing a new risk control model will also change the current DeFi system. The biggest problem with the current DeFi is that it relies heavily on centralized institutions such as USD Stablecoin, centralized lending, and market makers.

R3PO believes that the current DeFi is more of a test product in the early verification stage than a real The main components of the credit economy system of a usable future DeSoc (decentralized society).

The path to the credit society has gradually become clear, and the gradual practical application of DID/SBT products will facilitate It is a proof of it, but the current DID/SBT products are still trapped within functional modules, besides, the real problem is still the lack of equality, Asia and Europe, the first world and the third world, North America and Latin America, endless What is revealed under the disputes is that the inequality in the current society has a tendency to infiltrate into the future society.

In the first part, R3PO discussed the development direction and carrier products of the main DID products. I won’t go into details about this, but what needs to be pointed out are the problems existing in the current development process of DID/SBT:

1. The centralization model is serious, and KYC (Know Your Customer) is the hardest hit area, showing serious Web 2.0 path dependence and mindset;

2. Unequal access to identity, underdeveloped areas will sell personal information at extremely low prices, which violates the original intention of privacy;

Product dumping from Three Worlds:

Image description: Main DID products

Image source: R3PO

Taking the Southeast Asian market as an example, it is not inferior to European and American counterparts in the field of GameFi, and has produced products with global influence such as Axie Infinity, YGG, Coin98, etc., but in DID The /SBT field shows obvious weakness. Only Orange, Galxe and Relation can be associated with Southeast Asia, while the other products are all from Europe and the United States. In terms of the probability of winning the competition, the bases of the two are seriously unequal.

In sharp contrast to the few project parties, there are many Southeast Asian users with cheap personal identities This product has been repeatedly abused, and this de facto inequality exists widely. If Web 3.0 itself cannot solve the equal access rights of identities on the chain, then credit and loans will still flow to giant whales and institutions, just like the past in traditional finance.

In the boom of WorldCoin in early 2022, build a chain for billions of people around the world Identity has become an eye-catching vision. In its vision, everyone's identity is scanned into the chain, which can get rid of the shackles of the existing centralized verification mechanism and create a utopia where information, identity, and assets flow freely.

It adopts a sales promotion mechanism, each collector buys Orb human iris collection equipment, Each collector can earn 10-200 dollars a day, and the number of its users has quickly rolled to more than one million. However, this kind of personal information collection itself is a kind of information exploitation. Compared with European and American users, Southeast Asia, African users are more willing to sell their information in exchange for prizes and tokens.

The front-end real name + chain anonymization must be a part of the decentralized credit society Evil way, after WorldCoin, the so-called DID/SBT products of Galxe and BinanceBAB are still conducting KYC operations. Compared with the compliance review of GDPR regulations in Europe and the United States, the Southeast Asian market has fewer restrictive measures for this, leading to In fact, personal data collection is unequal.

Real DID/SBT products do require a lot of user data like WorldCoin, Galxe, and BAB Then identify the user's identity, but the acquisition of this identity identifier needs to go through a long-term decentralized construction. Like DeFi products, centralized products cannot adapt to the future development trend of decentralized society.

Inequality has existed for a long time in Web 2.0, but this shackle should not exist in Web 3.0 , at least, the promise of a society of equal access to all is a long-term momentum for the industry.

Conclusion

The DID caused by the data on the chain will promote the disclosure of personal identity on the chain, so can the protection of privacy still be achieved?

In the previous logic, the data on the chain cannot be revoked, no matter true or false, right or wrong , good and evil, legal or not, any information confirmed on the chain will never be forgotten, and mastering someone's secrets is also a time-tested cyberbullying cheat in the real world.

For the current DID/SBT products, the behavior data generated will be in the chain DeFi financial data will be collected and scored. Individuals can access arbitrary data without permission, but so can others.

In the current idea, ZK technology may be the solution. Personal information can be recorded, but the authenticity of the information can be judged without the other party clearly knowing the specific content. Pseudo-personal credit status, the fundamentals, rating and confirmation of rights are to separate the differences between people, and in order to suppress this peeping desire, while ensuring the effective operation of the decentralized society, more technical routes are needed Strike a balance between privacy and efficiency.