Our objective is to:
- Integrate more ID provider SDKs into ProofSpace (we already have Onfido)
- Enable PRISM VC issuing from ID providers for a range of checks: identity document verification, liveness check, KYC/AML, etc.
- Enable verifying organizations to set their tolerance on the age and reliability of the different identity attributes (i.e. values) using credential predicates
- Support publishing of KYC-verified token for use in smart contracts.
Our audience is:
- Organizations with regulatory requirements for KYC or customer identification
- Organizations for whom there is a business imperative (e.g. risk, marketing, customer service, etc.) for customer identification
The outputs will be:
- A standard “KYC-verified” credential schema that is used by all ID providers in ProofSpace.
- The ability to use the ProofSpace Dash to configure digital KYC steps into a service workflow in the ProofSpace App (e.g. passport photo and selfie).
- Automatic issuance of the KYC-verified credential to the end user upon completion of the digital KYC steps.
- If digital KYC steps have been completed elsewhere and the user already has their KYC-verified credential, let them use it to complete the step for which digital KYC was required.
- Publish a native or Datum token of the KYC-verified credential which can be used in a smart contract.
Possible use cases include:
- Confirming that a transaction has taken place in order to gain access to a site, service, etc.
- Confirming that a task has been fulfilled in order to execute a smart contract and receive payment
The impact will be:
- Users get a reusable KYC-verified credential that gives them access to more services and acts just like a physical ID (which is reusable for free).
- Businesses achieve cost reduction by verifying existing KYC-verified credentials rather than repeating digital KYC (at a cost of USD$1-4) for each new onboarding.
- Businesses reduce customer drop-off and churn in case a user doesn’t already have KYC-verified credential by offering the digital KYC workflow.
- Businesses and other institutions are able to exchange KYC-linked crypto tokens for improved transparency, accountability and reduction of illegal activities.
- All stakeholders gain the possibility to use KYC-verified token in smart contracts - the open way to encode “one person-one vote” principle in a smart contract.
The proposed solution addresses the challenge in the following ways:
The overall question to be addressed by the challenge is: “What solutions can we develop and implement with Atala PRISM to have the most positive impact and opportunities for rapid growth of Cardano”.
The KYC-verified PRISM credential should be one of the most frequently used and highly valued credentials in the PRISM/Cardano ecosystem. The reusability of the credential dramatically reduces the incremental cost of ID verification that otherwise occurs with one-time ID checks. One of the areas of focus of the challenge is: Self-governance of Emergent Communities. The KYC credential is high-value and enables use cases where customer identification is a requirement for business success; whether this relates to customer on-boarding, transaction verification, voter registration or user authentication.
The project is highly relevant to the key metrics for the challenge:
- The sum of realized production pilots or launches in 2022: we anticipate that this proposal will enable the use of the KYC-verified token in smart contracts in particular, and result in a wave of “one person-one vote” use cases.
- Discovery of repeatable patterns in use-cases: this is a repeatable pattern that can be used across a range of use cases: we hypothesize the KYC-verified token is the best open way to encode the “one person-one vote” rule into a smart contract.
- The number of issuers, holders, and verifiers: the pattern can be repeated across multiple use cases and this can be achieved easily with ProofSpace’s no-code solutions. The resulting increase in production deployments should increase the number of issuers, holders and verifiers, with new issuers in particular including ID providers and new verifiers including service providers who require the KYC credential to do business.
- The number of verifications performed on credentials in production: the high-value KYC-verified credential should be a driver of verifications.
Business relationships: Each KYC provider, such as Onfido, requires a business relationship and this can be a bottleneck affecting the number of available ID providers. We mitigate this risk in the following way:
- We have already integrated the Onfido SDK into ProofSpace under an existing business relationship
- We have already held in depth conversations with a number of other KYC providers who recognise this as a potentially competitive angle for their commercial teams
- We take comfort that users ultimately only need one KYC provider to fulfil the desired flow (the choice to have multiple providers is a longer-term risk mitigation strategy to avoid over-reliance on a single provider and provide options to end users).
Regulation: The utility of the KYC-verified token for mainstream financial services will be limited until regulation permits the use of reusable KYC credentials. Regulation already permits the use of reusable KYC in many jurisdictions depending on the value of the transaction, the nature of the transaction and the legal status of the transacting parties. Regulated entities wishing to adopt this technology in their business models will need to understand what is permissible given their particular context.