Accumulate An Identity-Based Blockchain Protocol Fri, 25 Nov 2022 22:45:36 +0000 en-US hourly 1 Accumulate 32 32 How Messaging Plays a Critical Role in the Mainstream Adoption of Blockchain Solutions Fri, 25 Nov 2022 21:54:58 +0000 The recent launch of Reddit NFTs (sometimes referred to as ‘collectible avatars’) is a great case study on how to successfully onboard over 3 million users to web3 without ever using buzzwords like crypto and decentralization, and without requiring users to understand the technology that they are using is powered by a blockchain. 

What was brilliant about Reddit’s rollout of collectible avatars is that it provided all those who purchase a collectible with an automatic non-custodial wallet to store their collectibles. In other words, instead of pushing self-custody and digital wallets as the selling point for users to jump into the crypto space, they pushed a product first that was already familiar to Reddit users (digital avatars) as the main selling point, and then used the digital wallet as a tool in the background for users to host their avatars. 

We can almost think of this as a clever and positive sleight of hand, where users are given what they want in the short term; digital customizable avatars,  while simultaneously adopting what they actually need long term; full ownership and digital assets and the ability to sell or transfer those assets across platforms if ones chooses. 

The latter description has always been a difficult sell for crypto enthusiasts pitching web3 to a mainstream audience. The reason being is that (to use an analogy) it is hard to appreciate the value of a guaranteed parking spot without first owning a car, or the value of quality kitchenware if one never cooks their own food. 

Simply put, having a certain attachment to an object or activity is the precursor to understanding the value of things that can help protect or enhance that object or activity. 

For many Reddit users, status and reputation within the Reddit community are things that are held in high value. Therefore, anything that provides them with the ability to either protect or enhance their status and reputation will also naturally carry a high value. 

Owning a rare digital collectible is something that is deemed important in the Reddit community. This not only translates to collectibles carrying a high monetary value but also to the need for the owners of these items to feel like they truly own them, which means they cannot be seized by the platform or any other authority. 

This is where the value of blockchains and crypto becomes apparent. Even if the majority of Reddit collectible holders never understand the mechanisms that enable their sovereign ownership of these digital items, the true value is in the ownership and the choices that come with ownership of digital goods, regardless of whether they choose to act on those choices (meaning, as an owner of an avatar, the option to sell or transfer my avatar will always be there regardless of whether I want to sell it or keep it).  This is something social media users have never experienced before. 

What are some ways in which this strategy can be applied to decentralized digital identifiers?  

One of the most commercially appealing use cases for ADIs is the ability to create verifiable credentials for industries where credentials are highly valued yet easily forgeable.

In many ways, post-high-school education is less about learning and more about acquiring credentials from credible institutions that will enable you to stand out from other candidates in the workforce. Many of the top universities in the world make their money not just from providing high-quality education but also from monetizing their reputation as a culturally significant institution of higher learning. A Harvard degree is a stamp of approval that says this person is competent enough to be associated with one of the oldest and most prestigious Universities in the world. The downstream effects of this are the ability for holders of those degrees to command higher salaries and gain access to more exclusive professional networks.

In a world where college degrees are increasingly becoming more commoditized, credentials from credible institutions become more important if one wishes to stand out from the crowd. 

The value of these credentials is not only superficial but can also be critical for leveling the playing field for candidates who are highly skilled but do not live in developed countries and are therefore seen as less valuable. Or in industries like healthcare where professionals are in charge of human life and hospitals and insurance companies need to know that physicians are properly credentialed before treating patients. 

The more important credentials become, and the more they are distributed digitally, the greater incentive there is to commit forgery, and the greater the consequences of forged credentials. 

In this context, ADIs present a natural solution that can cut through all of the marketing buzzwords and misconceptions about blockchain and crypto that obfuscate the value of decentralized digital identifiers.

Now all of a sudden the conversation shifts from ‘blockchain technology’ or ‘decentralized and censorship-resistant protocols’ to simply  ‘verifiable digital credentials’.  

The former is abstract and unrelatable, while the latter is familiar and simple enough for those who value credentials to understand. Even though the former supports the latter, the latter is the only selling point that justifies the target groups’ further understanding of the latter (after all, why else should they care about blockchains unless it serves their immediate needs in ways that other alternatives cannot?). 

This is the important lesson that Reddit likely took from observing the rise of NFTs in 2021, and the negative reaction from the gaming and broader tech community around NFTs. 

Accumulates’ mission is to be the bridge that connects the traditional economy with the web3 ecosystem through decentralized identities. Taking a book out of the Reddit NFT playbook, we’re providing a suite of solutions that strike at the core of what mainstream users value; such as transparent and verifiable credentials, or business-to-business transactions between companies operating in different jurisdictions. 

These are ultimately use cases where ADIs can serve a critical role in enhancing how individuals and entities interact online, without making blockchain technology a necessary part of the messaging to drive user adoption. 

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Use Case: Curbing the Effects of MEV Through ADI-Enabled Reputation Systems for Validators Wed, 23 Nov 2022 16:20:27 +0000 Miner Extractable Value (aka Maximum Extractable Value for non-PoW blockchains) or MEV has taken the crypto world by storm in the past year. 

MEV is simply the reordering, inserting, or censoring of transactions within blocks in order to extract additional value beyond the standard block rewards or transaction fees that a validator would normally earn. It is also the method by which non-validators can identify and exploit front-running or arbitraging opportunities by paying higher gas fees to validators to insert their transactions first.  

Blockchains are decentralized networks consisting of validators who are tasked with recording and verifying transactions on the network. Validators earn transaction fees for adding new transactions to a block and a block reward when the latest block is added to the chain. 

Since validators have a final say on which transactions get added to blocks, they can take advantage of their position by inserting transactions that can generate the most fees for them into a block before others, or outright re-organizing the sequence of blocks on the chain so that the ones containing transactions that were submitted with the highest fees can be ordered first.

In cases where the exclusion of a certain transaction could lead to a large liquidation event, validators could theoretically exploit this opportunity by taking a short position on the token that would be liquidated as a result of not being included in the next block.  

Other market participants called ‘Searchers’ can also take advantage of MEV even without running a node. They do this by running sophisticated bots that scan the blockchain for high-value transactions that have yet to be picked up by validators, then essentially front-running them by paying a higher gas fee in order to get their transaction in for the same buy or sell order of a token but at a more preferential execution price. 

In other words, market participants seeking to exploit front-running and arbitraging opportunities are willing to pay a higher premium in gas fees to get their transactions added to the next block. Validators, who are rewarded by the transaction fees they earn through this auction-style system, are naturally incentivized to insert transactions into the next block that pay the highest fees, which usually come from front runners or arbitrageurs.  

What are the impacts of MEV? 

MEV is made possible due to a symbiotic relationship between well-capitalized traders and maximum profit-seeking validators. 

Unfortunately, this relationship comes at the cost of regular participants who are simply trying to buy tokens to acquire their favorite NFT, play a blockchain game or use a lending protocol.

For these people, MEV is considered to be an ‘invisible tax’ on their transactions, since it usually costs them more to execute a  transaction because they pay a high price due to front running. 

What are the impacts of MEV? 

Some consider the act of reordering transactions in order to front run or extract the most fees to be unethical, while others see it as a normal part of free markets. Front running is rampant within the traditional stock market. In fact, the industry of high-frequency trading is primarily built on the idea that there is more edge to be made in being the first to execute a transaction (and therefore executing at a better price) than trying to pick which direction the market will go. 

Regardless of the ethics around MEV, the fact remains that the benefits accrued through MEV can be massive and are anything but evenly distributed amongst the crypto populace. 

Only those who have a significant advantage in terms of technical capability and information asymmetry can reap the benefits of MEV.  

This brings up the question of whether MEV should be prevented for the sake of fairness or whether there can be a system put in place to incentivize MEV participants to distribute a portion of rewards accrued through front running and block reorgs to users of the network. 

How Could ADIs Prevent MEV? 

Accumulate Digital Identifiers or ADIs are a solution for assigning unique digital identities to assets, individuals, or entities on the blockchain. Its unique key management system allows individuals and entities to generate multiple wallet keys that are linked to an ADI.

ADIs have the potential to serve as a critical mechanism for enforcing behaviors that will either prevent MEV or make proceeds earned through MEV more equitably distributed to token holders.

For example, we could imagine a scenario where ADIs are assigned to wallet keys owned by searchers and validators. We could then create a system of penalties and rewards that accrue to the MEV participants’ wallets over time based on certain behaviors.   

For validators, penalties could come in the form of slashing a small amount of their staked ACME, deducting points from an assigned reputation score that may deter future token holders from wanting to delegate their tokens to the validator, or imposing a tax on transactions from the validators wallet that is distributed to the networks treasury (if MEV is an invisible tax on regular users of the network, we can think of this as a tax refund paid for by the largest beneficiaries of MEV). 

While these solutions may not completely prevent MEV, they can enable MEV to be minimized or at least leveraged in a way that benefits the entire network. 

Ultimately, MEV is a natural byproduct of market participants acting on incentives using open-source and permissionless technology. The benefits primarily accrue to well-capitalized and highly technical searchers, as well as validators who are purely driven by the need to maximize profit. Meanwhile, the costs accrue to regular users who are forced to pay for tokens and NFTs at higher prices due to front running. 

The extent to which MEV can be controlled largely depends on the network’s underlying protocols and the culture of those who inhibit that network (e.g speculators vs consumers).

Accumulate enables a way to institute identity and reputation at the base layer. This should make it easier to identify which validators are benefiting the most from MEV and which validators are only choosing to earn value through standard transaction fees and newly issued tokens. From this design, we can enforce rules that essentially tax MEV and distribute the proceeds to the network treasury, which it can then distribute back to token holders.

Linking the wallet addresses of validators on other chains to ADIs would likewise enable MEV wallets to be aggregated into a single transparent database. This would provide more transparency for users and Dapps to decide for themselves how or if they want to interact with MEV wallets. 

The possibilities that can be explored to curb the effects of MEV through digital identifiers and validator reputation systems is purely speculative at this current time. However, through Accumulate, we believe there is potential for lots of innovation in this area in the coming years. 

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Use Case: Audit Trails for CeFi Creditors using ADIs Tue, 22 Nov 2022 21:10:19 +0000 In recent months, there’s been another example of the damage caused by the lack of transparency within the world of CeFi crypto companies.

The decline in crypto prices set off a domino effect of imploding crypto hedge funds, lending companies, and exchanges that played loose when it came to risk management and safeguarding customer funds. 

The recent crash of FTX is by far the most egregious example of mismanagement of customer funds by a custodian that we have witnessed by a high-profile centralized exchange.

To give a quick summary of what happened: FTX skirted its fiduciary duty as a centralized custodian by lending customer deposits to its sister firm Alameda, a market-making & trading firm that was famous for providing liquidity to the crypto markets during DeFi Summer and infamous for allegedly using their close relationship with FTX to gain access to customers trading orders in order to trade against then.      

When Luna crashed and 3 Arrows Capital imploded, Alameda suffered a major loss to the tune of a few billion dollars. This loss threatened to put the firm out of business. 

Sam Bankman-Fried, the now former CEO of FTX, made the decision to plug the hole in Alameda’s balance sheet with deposits made by FTX users. 

This action exposed FTX to risks of insolvency in the event of a bank run, which is exactly what occurred when rumors of both Alamada and FTX’s financial woes led Binance CEO CZ to liquidate their stake in FTX by selling the exchange’s token FTT. 

This triggered a bank run on fears that FTT’s loss in value would lead to forced liquidation of FTX’s outstanding loans, creating further instability. The bank run naturally led to a pause on customer withdrawals, FTX bankruptcy filing, and all the revelations that have come to light since.  

What’s clear for this incident and the Celsius, BlockFi, and 3AC incidents is that there is far too much opacity in how CeFi companies operate their business. 

The simplest way to verify the solvency of a business is to look at its balance sheet, which should provide a clear breakdown of assets and liabilities. 

As private companies or companies that operate in offshore markets with limited regulation, these CeFi companies have no legal requirements to publicly share their balance sheets. 

This puts investors and especially users in the precarious position of having to trust that the company they are custodying their funds with, or the company who is borrowing their funds in order for them to generate yield on their crypto is solvent.

In the wake of the FTX crash, several exchanges have come forward to provide ‘proof of reserves’ as a way to rebuild trust with their customers. However, proof of reserves is simply a display of the number of assets that these exchanges have on their balance sheet, which is only half of the equation. 

As we said before, verifying the solvency of a business requires looking at a breakdown of both assets and liabilities. Regarding liabilities, this can be more complicated, as it involves not just knowing how much money the exchange owes, but also who the counterparties are that are owed this money.

Using ADIs to Create a Verifiable Audit Trail of CeFi Creditors 

This is a problem that is perfectly suited for decentralized digital identifiers (DIDs). 

DIDs refer to a system for assigning unique digital identities to assets, individuals, or entities on the blockchain. Accumulate Digital Identifiers (ADIs) build on this technology by presenting human-readable addresses that are chosen by individuals or assigned by organizations to represent their presence on the Accumulate Network. 

Accumulate Network can serve as the de facto audit and communication layer for the transmission and recording of all data relating to CeFi assets and liabilities. 

Everything from the list of individual creditors and the loan transaction receipts to the cold wallet addresses of crypto assets representing user deposits could all be registered as an ADI.

The goal would be to make it possible for anyone to observe the ratio of exchange assets to outstanding liabilities in real-time, and determine how safe it is to deposit funds to the exchange or Cefi lender based on this ratio.

Let’s walk through some examples of what this could look like: 

First, to briefly explain how CEXs and CeFi lenders manage user funds: 

CEXs and CeFi lenders are custodial services, where users are issued public key addresses that are all tied to a set of private keys owned by the platform. This gives the platform control over the underlying assets while still giving customers the ability to send and receive (with the platform’s permission) using the public key address tied to their account. 

On a centralized exchange, if a customer purchases 10 ETH with their credit card, I am required to purchase an equivalent amount of ETH and store it in a cold wallet to match the user’s holdings. Similarly, if the user deposits 10 ETH from their wallet, I must store that 10 ETH in my reserves so that I can deliver it back to the user if they choose to withdraw their funds. 

Customers who use CeFi platforms are essentially trading IOUs that they trust are fully backed by the exchanges reserves. All users crypto deposits are supposed to be backed 1-to-1 on the CeFi platform. This means 10 ETH of users’ deposits must be matched with 10ETH of reserves. 

Matching crypto deposits with cash reserves is highly risky because if crypto prices appreciate then it increases the mismatch between the value of IOU deposits and exchange reserves. The same mismatch can occur the other way around. 

If there is a mismatch in the value of the assets held by the exchange and the total IOU value of user deposits, it means that the exchange will be unable to fulfill all withdrawal requests if all users wanted to withdraw their funds at the same time. 

Now, even if the exchange has reserves that match or even exceed user deposits, one still needs to verify that only the users have claims on those reserves. 

For example, if 10% of an exchange’s reserves are loans that can be recalled at any moment, then in reality the exchange does not own that portion of their reserves even though they reside in their cold wallets. 

Similarly, if a CeFi Lenders promising to generate 8% APY with user deposits cannot provide a transparent audit trail to show who the counterparties are that borrowed user funds to provide that APY, then the user is taking much greater risk than they are aware of. 

Therefore, there are  2 important questions to answer: 1) how do we verify who has claims on the exchanges reserves? 2) How do we verify who are the counterparties that CeFi lenders are lending user deposits to? 

This is where the Accumulate Network can help CeFi platforms provide much greater transparency. Exchanges can onboard their lending counterparty to the Accumulate network and tokenize their loan agreements such that the size and terms of the loan are transparent for all users to see. 

These counterparties would serve a critical role of confirming the details of the loan by registering the exchange’s liability as an equivalent asset on their balance sheet. 

These details could be embedded into the subdomains of the exchange and creditors ADIs:

Exchange ADI string Creditor ADI string 
acc://exchange/acc://exchange/liabilitiesacc://exchange/liabilities/creditor-1acc://exchange/liabilities/creditor-1/balance acc://creditor/acc://creditor/assetsacc://creditor/assets/exchange-1acc://creditor/assets/exchange-1/balance 

Similarly, CeFi lenders could onboard all off-chain counterparties to whom they lend user deposits in order to generate yields.

 If these counterparties are transferring user funds to other counterparties, then this trail must be documented as well. The end goal should be for users of the CeFI lending platform to be able to locate the wallet address where their deposits are being held, regardless of how many counterparties it moves through. 

This is where the Accumulate key management system could provide value. It allows entities to generate multiple wallet keys that are linked to a decentralized digital identifier or ADI. Entities have access to a set of key books which reference multiple keys within a Key Page. Keys can be arranged based on a set priority. For example, you can create high-priority keys that are placed in cold storage for use in case your other keys are lost or compromised. 

In addition, each account or sub-identity on the Accumulate network can be designated a specific key page. You can have a key page consisting of keys for significant transactions such as moving funds on behalf of a DAO treasury of institutional clients and another key page for transactions of lower importance, such as testing newly deployed Defi smart contracts. 

Lastly, Key Books can also allow ADIs to update their security settings to include multi-sig transactions (transactions that require 2 or more digital signatures), delegated transactions (transactions that can be initiated by an external authority based on 3rd party verification), managed transactions (transactions that include self-imposed limits on spending or frequency) or other conditions without having to touch high-priority keys, thereby maintaining the highest possible security standards and minimizing vulnerabilities. 


These are just a few examples of how CeFi platforms can follow DeFi in offering a more transparent and auditable record of their balance sheet and activities. 

Given all that has happened in the past 6 months, exchanges and CeFi lenders should be highly incentivized to onboard all counterparties unto a digital identity layer like Accumulate. 

This will be an important first step towards restoring trust in their users and bolstering their reputation as entities that not only profit from but also believe in the power and ethos of blockchain technology.

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Use Case: A Unified Digital Identity Layer for Multi-Chain Ads Fri, 11 Nov 2022 17:20:49 +0000 Digital identities allow companies and protocols to link users actions from the top of the marketing funnel (engaging with a post on a decentralized social media site) to the bottom (connecting their wallet to a dapp, purchasing an NFT or token, etc). 

Accumulate aims to establish a communication and audit layer for all individuals, entities, and blockchains to transact with each other using Accumulate digital identifiers or ADIs – 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.

In pursuit of this goal, a recognized challenge of Web3 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. 

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 indeed layer that can most accurately represent the Web3 space in its entirety. 

We believe creating a universal digital identity layer is the first step to enabling web3 marketing and advertising programs to become feasible, as companies and protocols will now have the means to understand who their users are at a much deeper level due to their consolidation of wallet addresses and decentralized IDs under a single digital identifier.  

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

Multi-chain advertising and loyalty programs 

A unified digital identity layer can unlock massive potential for multi-chain loyalty programs. These are programs that would enable users to earn loyalty points by using Dapps across different blockchain networks. As the largest Dapps like Uniswap and Aave extend their utility to layer 2 networks and EVM-compatible chains, it only makes sense that many of the same users will be accessing those Dapps from different chains. 

The same thing can be said for app-chain ecosystems like Cosmos and Avalanche that are building a highly interoperable experience for users to migrate between games, NFT marketplaces, and DEXs.  

If these protocols want to reward users for their continued support of their products, they need a way to track which wallets from which chains belong to the same user. 

ADIs would massively improve the ability for companies to target users with ads that are most relevant to them based on their on-chain behavior, which will become more clear as their various wallets from different chains are tied to a single ADI. 

In line with the ethos of web3 and digital ownership, we can expect this experience to be one that benefits not only advertisers but also the end user by enabling them to monetize their data in a variety of ways. 

For example, we could see the emergence of decentralized advertising networks (DANs) that serve as an intermediary between ADI holders and the brands that wish to reach them based on their on-chain activity. 

These DANs could reward ADI users for opting into promotional campaigns by receiving a cut of the revenues the network earns from brands that pay to gain access. Plus, as a potential bonus, users could also receive a cut of the revenues generated from the sale of new products or services sold by those brands through the ad network.

All the user would need to do is connect their ADI to a smart contract, which would reveal to the DAN the history of Dapps and networks that the user has interacted with, enabling them to direct brand ads toward the most relevant users based on their on-chain activity. 

Over time, as on-chain activity amongst ADI holders grows, and as DANs are able to peer into the activities of more ADIs, their routing process will become even more tailored and sophisticated, resulting in more targeted ads and better ROI for brands.  

In another example, we could imagine a scenario where an ADI holder gets shown an ad for a new NFT based on the DAN being able to deduce that there is a 70% correlation between ETH addresses that minted a previous NFT they currently own and the addresses that are now minting this new NFT. Such analysis would significantly raise the chances of the ADI holder being interested in clicking that ad and purchasing the NFT. 

ADIs would also be a game changer for referral programs. Traditional online referral programs lack transparency, are easy to manipulate and are incapable of providing the type of sophisticated, second-order analysis that would make it possible for referrers to get rewarded over the course of a referred customer’s lifecycle with the product and affiliated products.

With decentralized digital identities and on-chain affiliate links, brands can easily verify where a user has come from and show proof to the referrer of how many people have interacted with their links. As the referred customers migrates from the first product to other on-chain products, this creates a trail that can be traced back to the original affiliate link, meaning the referrer can potentially reap the rewards from other affiliate programs simply by starting the user on a path to adopt one product, which leads to multiple over time. 

Multi-tiered affiliate programs would create a lot of value in the Defi space.

For example, Instead of getting rewarded one time when a referred user makes a trade on a DEX, referrers could receive multiple tiers of rewards based on that user trading on a DEX, then deploying capital on a lending protocol, then staking their assets on a different blockchain. All of this could be easily trackable using ADIs that consolidate wallet addresses and other decentralized domains. 

Ultimately, online marketing and advertising decisions have always been driven by insights brands gather through data. Blockchains provide a new medium in which the bulk of user data is transparent for everyone to see, yet brands have been unable to make commercial sense of this data due to the disparate nature of a multi-chain world and the challenges of dealing with pseudonymous addresses. 

ADIs represent a major step in the direction of enabling users to consolidate their on-chain activity under a single human-readable address. This presents a major opportunity for brands to connect the dots between users’ on-chain activity and their preferences as a consumer. 

With these insights, companies may finally begin to understand how to market to web3 consumers, a major catalyst that could drive the top brands in the traditional economy to embrace blockchain technology.

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Use Case: How ADIs Leverage Social Connections To Enhance Economic Relationships Fri, 04 Nov 2022 15:17:49 +0000 There is a concept in social psychology known as ‘six degrees of separation’ which states that all people are six or fewer social connections away from each other. 

This means that given any random sample of people from anywhere in the world, you can draw a linkage between their social relationships to find a mutual connection no more than 6 relationships away. 

This idea has many profound implications, including the idea that our world is much smaller and interconnected than we perceive it to be. With the advent of the internet and social networks, these links have become even more apparent as well as our capacity to form new relationships and collaborate on projects at a greater scale than in any other time in history 

In the same way that the internet has made the concept of six degrees of separation more relevant, we believe that the emergence of blockchains and decentralized digital identifiers will enable people to leverage social connections in new and exciting ways that are currently not possible with the current system. 

Digital Identifiers refer to a system for assigning unique digital identities to assets, individuals, or entities on the blockchain. On Accumulate, there are Accumulate Digital Identifiers (ADIs), which are human-readable addresses chosen to represent one’s presence on the blockchain. 

ADIs enable more flexibility and deployment of complex operations by issuing a hierarchy of keys with different permissions or levels of security. 

This allows entities operating on the blockchain to more easily build standardized yet scalable protocols for other entities to interact with and exchange sensitive information with them based on their access permissions for specific data sets.   

Using ADI’s, Accumulate can serve as the de-facto communication and audit layer between blockchains, enabling the seamless transfer of tokens or other kinds of digital assets between ADI’s across different chains regardless of their consensus mechanism. 

What this means is that every individual or entity who holds an ADI could potentially run a query that pulls all of their primary, secondary, and tertiary social connections on-chain and across chains. This would enable them to gain instant access to the full scope of their social networks and construct economic relationships based on where each connection falls within the spectrum of the 6 degrees of separation. 

For example, we could envision a lending protocol that structures loan terms that are not solely based on collateral or credit score, but instead based on where the borrowers sit along their spectrum of the 6 degrees of separation. 

If the borrower has a primary relationship with an existing borrower (i.e both borrowers have a pre-existing business relationship) then the interest payments and/or collateral requirements would be lower compared to if the borrower had a pre-existing business relationship with another entity that has a primary relationship with the first borrower, or if the borrower had a  pre-existing relationship with an entity that was 2 or more connections away from the first borrower.   

From a bank’s perspective, it is less risky to lend to a business that earns a significant portion of their revenues from an existing client whom they already trust (e.g a landlord that receives rent from a grocery store that has received a loan from the bank). 

This is in contrast to a business that has no prior or a weak relationship with the client and therefore is not part of the economic chain that the bank is already supporting.

On Accumulate, the ability to identify these types of relationships would become significantly easier overtime as more businesses adopt ADIs to present themselves on-chain. 

Managed transactions (a form of smart contracts on Accumulate) could be coded to operate based on on-chain analysis that identifies primary, secondary, or tertiary connections and adjusts the terms of the loan based on the strength of the connection. 

This same principle could be applied to solving complex logistics problems within supply chain networks, where the ability to identify and form relationships with secondary or tertiary connections could save companies millions of dollars in shipping and transportation costs. 

Ultimately, one of the most important factors for enhancing one’s capacity to leverage social connections is interoperability. Increased connectivity through the internet has accelerated our ability to identify primary, secondary and tertiary relationships and as a result, form new primary relationships that creates an entirely new set of secondary and tertiary connections, thereby exponentially expanding one’s social network. 

ADIs enable individuals and entities to experience this phenomenon through a transparent and permissionless blockchain network. 

By forming a unified communication, audit, and identity layer for the web3 ecosystem, we are expanding each member’s capacity to identify and form new social connections, while enhancing economic relationships through managed transactions that operate based on the degrees of separation between counterparties. 

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Accumulate Mainnet Activation Mon, 31 Oct 2022 18:24:31 +0000

Today The Accumulate Foundation is announcing the activation of the Accumulate Mainnet Alpha Version. This activation will unlock the full capacities of Accumulate’s decentralized digital identity solution for both the crypto and traditional economy. 

Accumulate intends to establish a communication and audit layer for individuals, entities, and blockchains to transact with each other using the protocol’s Accumulate Digital Identifiers (ADIs). 

Unifying Web3 With Accumulate Digital Identifiers (ADIs)

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

While blockchain technology promotes open source and permissionless innovation, a by-product of the unrestricted expansion of new protocols and Dapps is that our ecosystem has become increasingly fragmented.

These market sectors offer a different set of value propositions and compete with one another for users, liquidity, and network effects. Over time, the desire for end users to access all sectors of the crypto economy has led to a series of patchwork solutions for interoperability like cross-chain bridges and centralized exchanges. 

For those operating on the inside of the industry, migrating funds from one chain to the next is a relatively simple process. Yet for most of the traditional economy, including banks, companies, and governments, the web3 ecosystem is still far too fragmented and complex to navigate. 

The key element that has been missing from this equation is a protocol focused on linking the entire crypto economy and the traditional economy together through decentralized digital identifiers. 

Digital Identifiers refer to a system for assigning unique digital identities to assets, individuals, or entities on the blockchain. Traditional blockchains are organized based on randomly generated public and private key pairs which are used to store funds and record transactions on a distributed ledger.  

The problem with the current key management system is that it lacks simplicity for the average user. The common approach of using the first and last characters of an address can leave users exposed to what is called the ‘man-in-the-middle attack’, which is a form of cyber attack where a bad actor could intercept or manipulate a transaction by injecting wrong information or changing the recipient’s address to their own. This is made easier due to the complex nature of randomly generated addresses.

Additionally, due to these addresses being randomly generated, public/private key management systems make it difficult to store ordered data sets or assign different levels of permissions to specific keys.  

Accumulate Digital Identifiers (ADIs) solve this problem by presenting human-readable addresses that are chosen by individuals or assigned by organizations to represent their presence on the blockchain. 

ADIs enable more flexibility and deployment of complex operations by issuing a hierarchy of keys with different permissions or levels of security. 

This allows entities operating on the blockchain to more easily build standardized yet scalable protocols for other entities to interact with and exchange sensitive information with them based on their access permissions for specific data sets.   

Using ADIs, Accumulate can serve as the de-facto communication and audit layer between blockchains, enabling the seamless transfer of tokens or other kinds of digital assets between ADIs across different chains regardless of their consensus mechanism. 

Accumulate Digital Identifiers (ADIs) as a Single Source of Truth 

The ultimate purpose of a decentralized 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, we aim to make it possible for not only dApps and blockchains, but also schools, hospitals, corporations, and government agencies to integrate ADIs into their current system in order to create a singular yet permissionless and censorship-resistant representation of all assets, entities, and people operating digitally. 

This opens the doors to all kinds of unique possibilities, including creating new DeFi infrastructure for Fortune 500 companies, auditing the multi-trillion dollar real-world asset economy, enabling a truly decentralized social media based on ADIs, replicating large corporate structures on-chain, and many more innovations. 

A core component of these next-generation web3 solutions is our unique set of wallet key management and authorization schemes. These are effectively tailor-made protocols that enable private-permissioned institutions to operate effectively on-chain. 

Key Management & Authorization Schemes

The Accumulate key management system allows entities to generate multiple wallet keys that are linked to a decentralized digital identifier or ADI. Entities have access to a set of key books which reference multiple keys within a Key Page. Keys can be arranged based on a set priority. For example, you can create high-priority keys that are placed in cold storage for use in case your other keys are lost or compromised. 

In addition, each account or sub-identity on the Accumulate network can be designated a specific key page. You can have a key page consisting of keys for very important transactions such as moving funds on behalf of a DAO treasury of institutional clients and another key page for transactions of lower importance, such as testing newly deployed Defi smart contracts. 

Key Books can also allow ADIs to update their security settings to include multi-sig transactions (transactions that require 2 or more digital signatures), delegated transactions (transactions that can be initiated by an external authority based on 3rd party verification), managed transactions (transactions that include self-imposed limits on spending or frequency) or other conditions without having to touch high-priority keys, thereby maintaining the highest possible security standards and minimizing vulnerabilities. 

Accumulate’s key management system makes it possible for entities to create a single signature or multi-signature authorization schemes. These are rules for determining the number of digital signatures required to validate transactions from an account and can be especially useful for funds that are looking to custody billions of dollars worth of digital assets on-chain and need to establish a hierarchy of permissions for how to securely manage those assets. 

Ultimately, Accumulate is paving the way for a more decentralized, transparent, and intuitive user experience for both native and non-native web3 adopters. 

The Accumulate Foundation and core protocol developers are excited to activate the Mainnet Alpha Version and begin onboarding individuals, enterprises, governments, and other blockchains to Accumulate’s universal identity, communication, and audit layer. 

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Use Case: Creating an Interoperability Layer for the Physical World Thu, 13 Oct 2022 14:06:18 +0000 Prominent investor and entrepreneur Peter Theil once stated that  “we’ve seen innovation in the world of bits, but not in the world of atoms”. This was in response to the question of whether technology has lived up to its promise to make the world a better place. 

The advent of blockchain technology has brought profound change to how we perceive money, governance, and the potential of open permissionless networks to create value. Yet this innovation has almost entirely been confined to the world of bits (i.e the internet and its digital economy). Meanwhile, the world of atoms (hardware, physical infrastructure, manufacturing, and supply chains) have seen almost no improvement from blockchain technology. 

For a variety of reasons, including regulations, costs, and liability, Innovation in the world of atoms has been notoriously more difficult to achieve than in the world of bits. 

Yet it is in the world of Atoms that technologies can truly build solutions that improve people’s lives. 

After all, we’re still physical beings that live in the real world and must consume physical things for survival. No amount of innovation in the metaverse will ever change this fact. 

So when it comes to the world of atoms, where are the key challenges we face and how can blockchain technology solve them? 

The first major challenge is broken supply chains. A common opinion shared by experts on humanitarian aid is that much of the world’s remaining problems with hunger do not stem from a lack of food but actually the inability to efficiently transport food and other resources to at-risk areas. 

Fundamentally, the problem is a combination of a lack of transparency and poor logistics that make delivering food, medicine, and other important things to people who need them.   

While blockchain cannot solve all of these problems, it is clear that by representing physical identities and goods on decentralized and permission-less databases, we can at least improve the amount of visibility into the logistics process and identify problem areas more efficiently. 

The Accumulate Network is designed to be a universal identity, audit, and communication layer for the traditional economy. Using ADIs, we can assign unique identities to individuals, groups, as well as physical goods such as bags of food, medicines, or other equipment. 

Improving IoT devices

One of the areas that we specialize in is the integration of IoT devices to blockchain networks. Currently, the challenges with IoT involves lack of efficient methods to store all the data that accumulates on IoT sensors, poor interoperability between manufacturers of these devices, which leads to siloed networks, and of course all of the classic problems that are incurred from centralized data systems, including weak security and lack of censorship resistance. 

IoT devices are a necessary solution to the problems of broken supply chains that make the distribution of food and medicines to at-risk populations more challenging. From a commercial standpoint, a unified supply chain network can radically reduce the costs for companies to distribute their goods globally and increase the efficiency in which faulty products can be identified and recalled. 

Accumulate is able to solve the problems of traditional IoT devices by assigning a unique digital identifier or ADI to each device, which can be controlled by wallet keys and managed through sophisticated authorization schemes. This enables owners of different sets of devices to decide how they want to share data with each other. 

For example, Governments and nonprofit organizations could coordinate food distribution efforts by sharing data on a single Accumulate chain. While non-profits assign ADIs to food packages that are being monitored by IoT sensors, governments could assign ADIs to citizens via their phone records. This would allow a link to be formed between the aid being distributed and the recipients in a way that is transparent and immutable. 

Proof of Physical State 

One of the ways in which innovation in the world of bits is also helping to accelerate innovation in the world of atoms is through the growing capacity for hardware devices like smartphones and IoT sensors to store and transmit data unto blockchain networks. 

This opens the door for critical problems in the physical world to be solved through real-time verification of data by people on the ground level. For example, we could create peer-to-peer delivery networks for transporting goods to places that are hard to reach or verify details about properties that require constant updates to be published to the blockchain in order for their ADIs to reflect their most recent physical state. 

By assigning ADIs to hardware devices like smartphones or IoT sensors, we can more easily enable owners of digital tokens that represent physical goods to verify proof of physical state. This is simply cryptographic proof that the details regarding something or someone in the physical world are in sync with their digital representation in the metaverse.

The easier it is to link the physical world with the digital one, especially when it is decentralized and transparent, the better companies and individuals can coordinate action in real-time to solve problems related to transportation, infrastructure, logistics, and more. 

Ultimately, the Accumulate Network is not only trying to solve critical problems with blockchain scalability and adoption through our identity layer, but also creating the infrastructure that will connect the physical world to the digital in a way that is decentralized, transparent, and propels further innovation to occur in the physical world.

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Use Case: Tokenizing Public Equity Markets Thu, 13 Oct 2022 14:03:11 +0000 Public equity markets are one of the largest sectors of the global economy. As of 2022, the total market capitalization of domestic companies listed on stock exchanges worldwide is 105 trillion dollars, with US equities representing about 41% of this figure, and China representing about 11%.

Yet, despite the massive size of these markets, public equities remain heavily siloed to their specific regions, making it challenging for individual and institutional investors to access certain high-value markets and invest in international companies. 

One of the primary objectives of blockchain technology is the ability to leverage permissionless networks to create open and transparent capital markets. Thus far this has been achieved in the market for tokens, where 20,000+ tokens are tradable by anyone around the world who has access to an internet connection and digital wallet. 

However the same cannot be said for stocks, which are more regulated and in many ways are tied to the strength and accessibility of their host countries’ national currencies. 

This explains why countries with heavy capital controls like China also limit access to international investments in domestic public equities.  

The siloing of international equity markets has led to investors migrating their capital to markets that are more open and accessible. As a result, there is a high concentration of investments in the US stock market, which is the most open and capital efficient in the world. 

In our efforts to become a universal identity and communication layer for the web3 and traditional economy, Accumulate can create a bridge that connects all public equity markets in the world under a single distributed network. 

On this network, companies, stocks, regulators, audits and both Individual and institutional investors would be represented as ADIs. institutional investors could create sub-identities to represent different entities that each hold a different basket of stocks from a particular country. This would help make tax compliance and auditing more efficient, as each country may have different compliance and filing standards.

Similarly, all participants in the network would be represented as ADIs and have their identities authenticated for KYC and tax purposes. This is particularly important as equity markets are highly regulated and companies require certain disclosures from shareholders to adhere to regulations. 

Using Managed Transactions to Enforce Limits on Foreign Investments 

We’ve created systems for enforcing certain types of transactions using authorization schemes that could potentially enable capital to flow into more restrictive public equities markets while their governments can still maintain control. 

For example, certain ADIs could be designated to international investors, which, through managed transactions, would restrict the amount of capital that they could invest in tokenized stocks from a particular country, thereby enabling that country to maintain a target ratio of foreign-to-domestic investments in local public equities. 

Auditing Tokenized Stocks 

Tokenized stocks are actually just another form of real-world assets (RWAs) since they represent certificates of ownership of a company that operates in the traditional economy.  

Like other RWAs such as real estate, commodities, machinery, or accounts receivables, there is a significant need for auditing solutions to verify that the metadata embedded within these tokens accurately reflects the current state of the real-world asset, and that this data is frequently updated as the state changes. 

This task requires an immense amount of coordination between the off-chain physical world and the on-chain protocols that will support these tokens. 

Auditing firms such as PWC, Deloitte, E&Y, and KPMG  could be introduced to the Accumulate network to ensure that the metadata for tokenized stocks are frequently updated with accurate information. We can think about this structure like a network of auditing teams operating like oracle nodes, where each node would be delegated the responsibility of verifying and periodically updating data for a particular set of stocks, including earnings, outstanding shares, employee headcount, etc.

Auditors could earn ACME in the process, which would be generated from the transaction fees of tokenized stocks that are traded on the Accumulate network.

Increasing Liquidity 

The barriers to entry that currently exist in international equities markets lead to fragmented liquidity. This is because the wealthiest investors gravitate towards markets like the US and Europe because they are more open. As a result, the majority of the liquidity also ends up residing in those markets. 

On the other hand, most emerging markets suffer from poor liquidity because foreign capital is restricted in its ability to invest. This leads to poor price discovery for stocks and limited ability for business owners to fundraise from a well-capitalized network of public investors. 

A unified global equities market would enable liquidity to be more dispersed to different markets, enabling greater price discovery and stronger financial support for local companies with sustainable business models. 

Liquidity could be managed via decentralized liquidity pools or LPs. Entities who own stocks could partner with exchanges or banks to provide liquidity for niche markets, using ADIs as the core infrastructure for representing liquidity providers, tokenized stocks, and shares in the LP.  

Improving Verification of Underlying Assets

In using Accumulate ADIs to represent individuals, entities and assets on-chain, we would eliminate the need for unregulated decentralized protocols to offer tokenized stocks, a practice that has led to problems for token holders unable to redeem their tokenized stocks for their full value due to under-collateralization. 

Tokenizing stocks in a regulatory-compliant way ensures that the stocks are collateralized with real stock certificates and that there are qualified auditors who can update the metadata with the latest information about the stocks being traded.

Ultimately, Accumulate has the potential to connect several of the world’s disparate equity markets under a unified identity and communication and audit layer. 

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Accumulate Testnet 9.0 Millau Viaduct – Mainnet Release Candidate 3 Mon, 26 Sep 2022 22:00:20 +0000 Today, Accumulate developers are announcing Testnet 9.0 Millau Viaduct – Mainnet Release Candidate 3. Named after the Millau Viaduct bridge located in Tran Valley, France, Accumulate’s Testnet 9.0 includes a variety of updates. Additionally, from this point onwards (until further notice), there will be two Testnets to make sure that third-party applications can remain stable. In addition, the DevNet will remain. The mobile application is compatible with the Beta RC1 version of the Testnet.   

  1. Testnet Beta RC1 is Testnet 7.0   
  1. Testnet RC3 is Testnet 9.0   
  1. DevNet is DevNet   

The mobile application will point to the Testnet Beta RC1  endpoint, which will be compatible with the Testnet Beta RC1 branch (Develop Branch – tag cli-v1.0.0-rc1.2) in the CLI and Testnet Beta RC1 in the Explorer ( To use new features in Accumulate, connect to the Testnet (9.0) Branch (Develop Branch – Tag cli-v1.0.0-rc3) in the CLI and use the Testnet RC3 option in the Explorer ( To interact with the Devnet use the Develop branch in the CLI and the Devnet option in the explorer (   

To switch from one branch to another in the CLI type git branch and the branch you would like to connect to. Make sure to do a git pull and go build to get the latest updates in the CLI.   

Protocol Highlights  

  • Import Pre-allocated ADIs – Adds a mechanism to add pre-defined ADIs to genesis and fixes some bugs.
  • Create identity sliding fee schedule – Add a sliding fee schedule for CreateIdentity transactions that charges more for shorter ADIs. The default schedule is exponential where 13 characters and below cost $5 and every character less multiplies the fee by 2 up to $20,480 for 1 character ADIs. This calculation is done after removing the `.acme` suffix. The dollar value is subject to change before Mainnet. 
  • Tag validator info with operator – Add an `Operator *url.URL` field to `ValidatorInfo` so validator entries can be tagged with the operator they belong to.

Accumulate Release Candidate 3 (RC3) Release Notes – 09/26/22 

🚀  New   

  • Prepare to upgrade testnet from RC2 to RC3  
  • Fix accounting of the faucet  
  • Factom genesis v2  
  • Export API types  
  • Import pre-allocated ADIs  
  • Fuzz test for executors  
  • Add index, time to block ledger  
  • Tag validator info with operator  
  • Support different peer addresses              
  • Include the major block index      
  • Stop on fatal error  
  • Shutdown if the DN stalls  
  • Create identity sliding fee schedule 

🔧  Fixes   

  • DN anchor accounting  
  • Anchor multisig bug  
  • Race condition on develop  
  • Cross-partition updateKeyPage signing    
  • JSON unmarshalling for some unions        
  • Entry hash in transaction result   
  • Refactor snapshots  
  • Don’t sign anchors when following            


  • Fix compatibility of transaction status  
  • Require key hashes to be 32 bytes             
  • Add read header timeout  
  • Support BPT entries with no account state  
  • Prevent or catch query tx panic   
  • Negative values check  
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VERSO to Receive Grant for Trust-Based Solutions for Multiple Industries and Ecosystems Mon, 19 Sep 2022 16:58:17 +0000 VERSO is a cloud-based portal that manages transactions across ecosystems for a wide range of markets and applications.  Ecosystems are comprised of independent companies that participate in supply chains, fulfillment processes, ordering processes, and other workflows that require interaction from multiple parties.  

Gartner defines a supply chain ecosystem as “A supply chain ecosystem is a community of organizations that shares and combines capabilities and develops equitable relationships to generate and exchange value to all participants.” 

Gartner also predicts that “By 2026, more than 50% of large organizations will compete as collaborative digital ecosystems rather than discrete firms, sharing inputs, assets, and innovations.” 

To ensure accuracy and compliance, these parties spend a significant amount of time and cost verifying the exchange of transactions among the other participating entities.  

To automate this verification requirement, VERSO has integrated with the Accumulate blockchain solution, resulting in VERSO being the high-value gateway to Blockchain for multiple industries and ecosystems. 

Why combine the two platforms?  

  1. Manage Company and Organizational Participation: – VERSO allows permission and organization of users at individual, group, and company levels. This hierarchy is a natural fit with Accumulate, since Accumulate uses a revolutionary identity approach for participation assignment. VERSO organizational configurations will result in corresponding user identities in Accumulate – resulting in easy-to-use, guaranteed, and certified user participation.  
  1. Audit and Verification – VERSO focuses on providing flexible workflow management, which creates activities such as status changes, step changes, field/value changes, record/data sharing,  verifications, etc. These activities are coordinated through VERSOs workflow and alert modules. With the Accumulate integration, VERSO passes associated data to the blockchain, ensuring the data is stamped and verified as needed, ensuring that these transactional activities can be trusted by all parties.  

The VERSO/Accumulate solution provides a powerful, flexible portal that not only manages workflow for all participants, but also ensures workflow activity and data is valid and trusted. Benefits include: 

  • Efficiency gains for all parties – accelerating transactions due to confidence in validity 
  • Reduction in verification time and cost 
  • Reliability in transaction history 
  • Accelerated decision-making based on reliability 
  • Increased security and comfort due to validation of participants identity 

Example Applications Include: 

  1. Reverse Logistics – Product Returns, Disposition, and Warranty Settlements 
  1. Medical device tracking and management 
  1. Recruiting Management across subcontractors  
  1. Spare Parts purchase and traceability through a supply chain 
  1. LAB Testing tracking and validation 
  1. Property Management Commission processing 

And many others that require a TRUSTED and reliable process among participants  

The Value Proposition for Ecosystems

Ecosystem participants spend significant amount of time verifying the information and data shared by participating partners. This is a common problem in any supply or fulfillment chain. Due to a lack of trust among parties and data reliability, each participant must individually verify and scrutinize the transactions, to ensure the accuracy of their operations and decision-making. Plus, companies have an overall lack of transparency to the origin and nature of product ingredients or parts, which hamper decision making, compliance verification, and problem resolution. In addition, ecosystem applications require clear hierarchies of users, companies, and associated permissions to allow problem resolution. The VERSO/Accumulate solution solves these problems, through the integration of identity hierarchies, blockchain validation of information exchanged, and the creation of overall trust and reliability.  

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