Web3 is a user-centric vision of the World Wide Web that adds blockchain technology to the backend of the existing internet to create a more open, trustless, and decentralized network. The core promise of Web3 is the ownership of one’s data and identity, which allows users to manage and monetize their content without the interference of a third party and engage with decentralized organizations, applications, and marketplaces through their digital identities. 

The market opportunities for Web3 extend from the art world to the financial sector, and the potential for mass adoption is reflected in the billions of dollars locked in DeFi smart contracts. However, technology challenges are hindering the institutional adoption of DeFi, which forms the financial backbone of the broader Web3 ecosystem. Security and identity are inflexible, scaling solutions are immature, and the integration of blockchain with legacy technology is more of an afterthought than a deliberate design decision.  

The Accumulate protocol is a blockchain that was designed around the Web3 needs of enterprise users and the DeFi needs of institutional investors. Its internal architecture scales linearly with adoption, and its throughput is high enough to support payment rails, IoT networks, and high-frequency trading platforms. Most importantly, the identity and security infrastructure of Accumulate is flexible enough to meet the dynamic needs of clients and adapt to the evolving Web3 ecosystem. 

Accumulate can model an organization’s structure 

An organization’s basic structure can be modeled on the blockchain as an interactive and dynamic hierarchy of identities. For example, a large company may have branches, departments, employees, and clients whose responsibilities may change over time. These hierarchies are difficult to reproduce on most blockchains because they’re organized around transactions and constrained by blocks. 

Accumulate is organized around human-readable, URL-based addresses that we call Accumulate Digital Identifiers (ADIs). URL addressing facilitates the integration of Accumulate with websites and mobile apps, while human readability minimizes human error and allows data to be intuitively organized into hierarchies in the same way that files can be organized into folders and sub-folders on your computer.  

The components of a hierarchical organization can be represented on Accumulate by top-level ADIs and nested sub-ADIs. For example, the ADI ‘bank’ may be associated with a sub-ADI ‘branch’. Responsibilities are represented by the various accounts that can be managed by each ADI and sub-ADI (e.g. data, token, and staking accounts). Both ADIs and sub-ADIs can also be managed, updated, and exchanged to provide the flexibility needed to adapt to the growth of an organization and the evolution of Web3. 

Each identity on the Accumulate network is treated as an independent blockchain and assigned to a subset of available validators that we call block validator networks (BVNs). This allows the network to be partitioned by identity and transactions between identities to be validated on devices as simple as a mobile phone. The network can be scaled to millions of transactions per second (TPS) by adding BVNs. 

Accumulate can model an organization’s security 

Blockchain security evolved to become more forgiving with public adoption of cryptocurrency and more functional with institutional adoption of DeFi. Better user interfaces have made blockchain more accessible to the non-technical public, while the integration of multisig with business APIs has allowed companies to securely replicate operations like payroll and accounting on the blockchain. 

Institutional investment in DeFi, however, is currently limited to small-scale experiments in borrowing, lending, and staking that represent a small portion of the potential market. Broader participation by institutional investors will require significant changes to security. Clients need assurance that their assets will be safe if their keys are lost or compromised, multisig accounts need resiliency against the loss of signators, and businesses need flexibility that matches the dynamic nature of their operations. 

An organization’s basic security operations can be modeled on the blockchain as an interactive and dynamic hierarchy of signatures that are backed by cryptographic keys. For example, important decisions that require the input of multiple people may be reproduced in a multisig transaction whose execution requires m signatures from n permissioned signators in an m-of-n type authorization scheme. 

Accumulate takes this further with its hierarchy of Key Books, Key Pages, and Keys/Key Book URLs. Key Books are authorities that specify which identity is involved in a transaction. Key Pages are signers for a Key Book that are organized by priority. Keys and Key Book URLs are signators that occupy slots within a Key Page. A Key Page with a higher priority can modify itself or a Key Page of lower priority, which enables features such as key recovery, key rotation, and key backup. The ability to modify multiple keys within a Key Page allows for dynamic multi-sig transactions. The option to specify a Key Book URL in a Key Page slot lets an account owner automate security or delegate authority to another identity.  

Since Key Books and Key Pages are indexed chains with URL-based addresses, signatures are auditable, human-readable, and time-stamped. This means that events such as the valuation of a property at a given point in time, the purchase of an insurance policy before a claim is submitted, or the use of a license before a contract expires can all be proven on the blockchain. Since Accumulate supports a variety of security standards (e.g. security algorithms, elliptic curves, and hash functions), these operations can be managed for multiple blockchains within the Accumulate wallet. 

Conclusion

Accumulate provides the backend infrastructure for identity and security management on the blockchain. Identity hierarchies allow companies to replicate organizational structures, while key hierarchies allow companies to replicate financial operations. URL addressing and multiple security standards facilitate interoperability with blockchains, websites, and traditional databases. Organizing the blockchain around identities allows the protocol to scale, and indexing signatures within chains that are associated with these identities provides a comprehensive framework for Web3 applications.