Creating a Universal Digital Identity Layer with Accumulate

Written by TJ

On March 17, 2022

In previous articles, we talked about Accumulate’s mission to establish a communication and audit layer for individuals, entities, and blockchains to transact with each other using Accumulate Digital Identifiers or ADI’s – human-readable addresses similar to website URLs that are chosen by individuals or assigned by organizations to represent their presence on the blockchain.

We view digital identity as a core piece of Web3 infrastructure that provides legitimacy to the concept of ownership and property rights in the digital world.

Yet one of the challenges that the Web3 space faces today is the lack of connectivity between the dozens of other blockchain-based identity solutions, each of which is vying for the same goal of achieving a universal identity layer. 

Of all the various emerging sectors of Web3, one could argue that decentralized identity solutions are the most reliant on network effects in order to achieve any form of successful adoption. 

An NFT marketplace consisting of just 100 users can still manage to sustain itself as long as those 100 participants have something of value that they are willing to trade with each other. Similarly, a DEX can function with only a handful of traders and trading pairs as long as there is consistent demand and supply for the assets available.

A decentralized identity solution is only as valuable as the number of individuals or entities it represents. The smaller the number of adopters of a digital identity format, the less useful each ID will be when it comes to accurately representing the online or offline behavior and reputation of its holder.  

The ultimate purpose of a digital identity is to serve as a single source of truth and a standardized form of accounting for all on-chain and off-chain activities that the identity holder has participated in and for all digitally native and digitized (or tokenized) assets that they hold. 

Under this description, it is essential that a digital ID be integrated into every Dapp or blockchain that a user has adopted in order to represent that user in the most accurate and complete way possible. 

To this end, the Accumulate Network is not just focused on creating its own digital identity layer for users to adopt, it is also focused on partnering with existing digital identity providers in order to consolidate these services under one universal identity layer that can most accurately represent the Web3 space in its entirety. 

Here is a list of popular blockchain-based digital identity providers that could become potential partners or collaborators of Accumulate in the future:

  • Ethereum Name Services (ENS)
    • A naming service on the Ethereum network that allows users to convert machine readable crypto addresses into human readable addresses. 
  • Solana Name Service 
    • A naming service on the Solana network that allows users to convert machine readable crypto addresses into human readable addresses. 
  • Civic
    • A protocol that provides on-demand, secure and low-cost access to identity verification services using Blockchain technology.
  • Self-Key
    • A blockchain-based identity platform delivering KYC solutions for individuals, companies, exchanges and other financial institutions.  
  • Social KYC
    • A solution that allows users to verify their identity by proving ownership of their social media accounts using their email and phone number as verification. 

Achieving seamless integration with disparate digital identity systems can be accomplished in the following ways: 

Enabling Cross-Chain Transfer of Digital IDs

We can enable users who hold identities on these various platforms to convert them into our ADI format, similar to how BTC can become WBTC by being embedded into a smart contract that converts the token to an ERC20 token, thereby giving it functionality within the Ethereum ecosystem.  Each uniquely formed identity on Solana, Self-key or any other identity service could be given an ADI wrapper that would enable it to function as a unique ADI within the Accumulate Network.

If we view digital identities as carrying the same properties as NFTs, it is easy to see how this concept is no different from creating a wrapped version of an NFT on another chain.

Using Bridges and Oracles to Synchronize Digital Identities 

Oracle networks like Chainlink have been integral to the growth of the DeFi ecosystem, particularly across multiple chains. Oracles enable data from external environments outside of a blockchain network to be communicated to smart contracts, allowing them to execute based on accurate and timely information. Oracles track the price of assets across various networks, while bridges enable assets on one network to be represented in another network using smart contracts to create wrapped tokens.

Together, these functions allow users to bridge tokens from one blockchain to another to lend out, use them as collateral for loans, or simply trade them with other participants on different networks. 

In a similar manner, Accumulate could develop bridging and oracle protocols that are specifically focused on porting existing identities over to Accumulate and synchronizing the data in such a way that would allow all versions of a digital identity to function as one and be updated in real-time regardless of what network they reside in. 

For example, imagine if a protocol existed that connected Accumulate to Ethereum such that every time a user created a new ENS domain name on Ethereum, an identical version of that domain name was generated as an ADI on Accumulate and reserved for a limited period of time for that user to claim. 

To claim their reserved ADI, the user could use their Ethereum wallet to sign a transaction on the bridge protocol that would lock their .eth domain in a smart contract, triggering the ADI version to be claimed by the user to operate within the Accumulate ecosystem.

.ENS (Ethereum) ADI (Accumulate)
johnsmith.eth →acc://johnsmith

If the user wished to exit Accumulate, they could simply unlock their .eth domain from its smart contract, rendering the ADI unusable until the .eth name is relocked once again. 

You could replicate this system across other identity networks such that whenever a new ID was generated on those platforms by the same ENS domain holder, data Oracles would relay this information over to the Accumulate network so that it would know to create an identical version that would be reserved on Accumulate. 

However, instead of reserving the ADI as a standalone identity, this time it could be reserved as a sub-identity under the first identity that was initially created to replicate the ENS domain.

.ENS (Ethereum) .Sol (Solana)ADI (Accumulate)ADI (Sub-ID) 
johnsmith.eth →j.smith.sol →acc://johnsmith →acc://j.smith

Over time this process would lead to a total synchronization of identities across multiple networks with Accumulate serving as the glue that eloquently ties each identity together under the ADI format.  

Single Sign-On (SSO) Using ADIs

One of the benefits of creating a universal identity layer is that it reduces the friction of onboarding to new Web3 applications or services, regardless of what networks they are based on. We can compare this to how web2 users can sign on to any website by using their Facebook, Twitter, or Gmail accounts. 

Once an individual or entity has created an ADI, they could potentially use it as their default address for signing into any Dapp or Network that already has a native identity solution plugged into its system. For example, we could envision using ADIs to trade NFTs on OpenSea instead of ENS. 

Ultimately, decentralized identity systems can only become truly effective once they have achieved synchronization with similar identity solutions to enable one cohesive identity layer for the Web3 space. We believe Accumulate is in the best position to achieve this owing to our emphasis on enabling cross-chain interoperability and the seamless onboarding of individuals and entities unto the Accumulate using the ADI system.  

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