December 4th, 2023
Leading companies in the DeFi and tokenization ecosystem, Polygon and DigiShares, join forces to create a new DID framework for tokenization, securities-based DeFi dApps and institutional DeFi, tentatively named DITO (Decentralized ID for Tokenization).
For several years, various parties have attempted to introduce a standard for decentralized ID (DID). All attempts so far have failed, sometimes due to vendor lock-in, profit-taking, other times due to the technology not being good enough or insufficient marketing. Maybe the stigma of ID vs KYC vs anonymity has also hindered the development of a standard.
This is a great pity as it prevents the blockchain ecosystem from delivering on one of the major value propositions, namely interoperability. How will dApps be able to interoperate if there is no widely adopted standard for DID? How will the crypto ecosystem survive and flourish with new KYC requirements from regulators across the world (e.g., MiCA)?
The answer: with a single, trusted, high quality DID framework: DITO.
DigiShares and Polygon are collaborating to create a global framework for open, transparent, secure, flexible DID with the standardization of verifiable credentials. The credential framework proposed by DigiShares is the key factor to the introduction of interoperability between KYC providers, exchanges and platform providers. KYC providers Sumsub and Fractal ID will be among the first to be integrated into the new standard.
The framework will be based on Polygon’s ID technology of issuing verifiable credentials and designed with fields crucial for KYC. These credentials will be used for white-listing and verification of wallets which will enable compliant on-chain issuance and trading of tokenized assets in real time. Polygon ID works across all EVM-compatible chains and is not restricted to the Polygon PoS chain. Polygon ID was created as an identity infrastructure for Web3 following the principles of self-sovereign identity and privacy by default.
To ensure sufficient support from industry participants, a new DID framework must not be dominated by any single actor – or group of actors. It must not be tied to any specific ERC protocol such as other proposed DID standards. It must be open for any KYC or accreditation provider to use and to assign verifiable credentials. And it must be available for free for any dApp to use. Under no circumstances may it be tied to any specific vendor’s ecosystem. And under no circumstances may it be a source of revenue or profit for any actor in the ecosystem.
Polygon ID is the current best bet for a DID standard that can power the tokenization ecosystem and make it interoperable. Polygon ID is already supported by many industry participants and it can be extended to support tokenization requirements for wallet white-listing and ID verification.
DigiShares and Polygon are collaborating to create this extension of Polygon IDs verifiable credentials with the goal to create a general purpose and widely adopted DID standardization. Two leading KYC providers, Sumsub and Fractal ID, have joined forces to support the new framework.
Sebastián Rodríguez, VP of Product at Polygon, mentioned: “This effort from DigiShares aligns quite well with our objective at Polygon ID of creating an ecosystem of re-usable identity. The DITO initiative is a great way to bring together industry actors interested in combining tokenized assets with a compliant identity layer to agree on a common framework. Reusable frameworks favor interoperability and pave the way for eventually forming industry standards”.
Claus Skaaning, CEO of DigiShares, stated, “This is one of the last building blocks needed to make the tokenization ecosystem interoperable and cohesive. We believe that Polygon is exactly the right partner to make this happen”.
DigiShares is a market-leading provider of tokenization infrastructure and soon the operator of one of the world’s first blockchain-based exchanges for real estate (RealEstate.Exchange). Sumsub and Fractal ID are market-leading providers of KYC infrastructure for crypto & blockchain. Polygon is of course the market leading L2 chain in the Ethereum ecosystem but also an excellent business development organization.
We invite issuers, platform providers, exchanges, KYC providers, and dApp developers to come work with us to ensure that this becomes an open framework accessible to all.
Technically, the Polygon ID SDK for issuing verifiable credentials will be utilized for KYC providers to easily plug into the framework such that their KYC verification can be turned into a verifiable credential that is inserted into the user’s DID. DIDs can be created by trusted KYC providers and can expire after a period of time.
Collaboration with trusted KYC providers enables data integrity for the framework to be reusable on multiple platforms simultaneously. With this vision a user needs to verify their identity just once and afterwards is able to join any platform which supports the verifiable credential framework.
The base of the verifiable credential framework will be expandable to suit the needs of parameters for different jurisdictions. These can include elements of the KYC verification such as liveness test, time of creation, KYC provider that created it, etc. In a way this can be compared to the popular ERC20 standard and its extensions, where the base layer stays the same to achieve standardization and companies build on top of it to extend its functionality to their needs.
The parties will create a central page where users can create their own DID – powered by various KYC providers – at a small cost in gas fees. Issuers and platform providers will be able to create DIDs for their users, based on credentials from trusted KYC providers.
Initially, all 150+ white label tokenization clients of DigiShares will get the option to create DIDs. Moreover, RealEstate.Exchange, the forthcoming blockchain-based exchange for the trading of real estate; will adopt the DID framework, in order to facilitate the transactions between 1,000s of listings and 100,000s of users.
Future plans include incorporating accreditation checks into the standard. To start with, Polygon, Ethereum and their test-net counterparts (mumbai, sepolia) will be supported.
A number of wallets will be supported from the start, including Metamask, Altme, Verida, Wallid, Clv, etc.
To learn more or join us, reach out to [email protected] or [email protected]
https://www.digishares.io/
https://polygon.technology/
https://web.fractal.id/
https://sumsub.com/
