Please describe your proposed solution.

Threshold Recovery Solution Integrated with Atala PRISM:

To address these challenges, we propose a threshold wallet recovery system tailored for integration with the Atala PRISM platform:

• Threshold-Based Key Recovery: Implement a recovery mechanism where the wallet's key is divided into fragments. These fragments are distributed among a user-selected trusted network, in line with the decentralized nature of SSIs. A predefined number of these fragments are required to reconstruct the key, ensuring a secure and distributed control.
• Seamless Integration with Atala PRISM: Leverage Atala PRISM’s capabilities for issuing decentralized identifiers (DIDs) and verifiable credentials. The recovery process would authenticate the user through these credentials, aligning with the SSI model.
• User-Centric Design: Ensure that the recovery process is straightforward, catering to users of varying technical backgrounds, and emphasizing user experience within the Atala PRISM ecosystem.
• Encrypted Backup on Cardano Blockchain: Utilize the secure and decentralized storage capabilities of the Cardano blockchain for encrypted backups of the identity wallet. Access to these backups would be contingent on the threshold recovery system, enhancing both security and accessibility.
• Adaptability for Diverse Use Cases: Design the solution to be flexible for various applications, making it suitable for both individuals and organizations using Atala PRISM for identity management.

Please define the positive impact your project will have on the wider Cardano community.

Having a robust and user-friendly wallet recovery feature sets Cardano apart from other blockchain platforms.A unique selling point like this will attract developers, businesses, and users to choose Cardano over other alternatives.

What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

Aligning with Market Needs in the SSI Space:

This threshold wallet recovery solution, integrated with Atala PRISM, addresses key market demands in the digital identity space:

• Increasing Adoption of SSIs: With the growing use of platforms like Atala PRISM, there is a heightened need for recovery solutions that align with the principles of SSIs.
• Focus on Security and Privacy: In an era prioritizing data security and privacy, this solution offers a decentralized and secure way to manage recovery, resonating with user concerns.
• Ease of Use and Accessibility: Recognizing the diverse user base of Atala PRISM, the solution is designed for simplicity and ease of use, making it accessible to a broad audience.
• Versatility in Application: The recovery system is adaptable for a range of sectors, including finance, healthcare, and government, where SSIs are increasingly utilized.

By integrating with Atala PRISM and focusing on these core market needs, the proposed threshold recovery solution offers a secure, user-friendly, and blockchain-aligned approach to managing and recovering identity wallets, fostering trust and efficiency in the digital identity ecosystem.

What are the key milestones you need to achieve in order to complete your project successfully?

Research on thresholdizing Signature Schemes and developing a Security Proof

Objective: Conduct thorough research to understand and develop a secure and efficient threshold signature scheme suitable for integration into Atala PRISM.

Tasks:

• Literature Review: Survey existing literature on threshold signature schemes to understand the current state of the art.
• Security Analysis: Analyze various threshold signature schemes for their security strengths and weaknesses.
• Feasibility Study: Assess the compatibility of these schemes with the Atala PRISM environment.
• Proof of Concept: Develop a basic proof of concept for the chosen threshold signature scheme.
• Security Proof Development: Create a comprehensive security proof to validate the robustness of the chosen scheme.

Timeline: 3-4 months

Deliverables:

• A detailed report on the chosen threshold signature scheme and its security aspects.
• A proof of concept demonstrating the scheme's feasibility.

>Implementing Thresholdized Signature Schemes in Apollo

Objective: Implement the chosen threshold signature scheme within the Apollo component of Atala PRISM.

Tasks:

• Development Planning: Create a detailed implementation plan, including the necessary cryptographic operations.
• Coding and Integration: Start the coding process to integrate the threshold signature scheme into Apollo.
• Testing: Conduct thorough testing to ensure the scheme's functionality and security within Apollo.
• Documentation: Prepare comprehensive documentation detailing the implementation process and usage guidelines.
• Peer Review: Have the implementation peer-reviewed for additional security and efficiency insights.

Timeline: 4-5 months

Deliverables:

• Fully functional thresholdized signature scheme integrated into Apollo.
• Complete documentation and test reports.

>Building a Demo for Issuing a Residence Permit

Objective: Create a demonstrative application showcasing the threshold functionality in a real-world scenario, specifically in issuing a residence permit.

Tasks:

• Use Case Development: Define the specifics of the residence permit issuance process and how it will utilize the threshold signature scheme.
• Demo Application Design: Design the user interface and experience of the demo application.
• Integration and Development: Develop and integrate the demo application with the implemented threshold signature scheme in Apollo.
• Testing and Refinement: Test the demo application in various scenarios to ensure reliability and user-friendliness. Refine as needed.
• Presentation Preparation: Prepare a comprehensive presentation that outlines the functionality and benefits of the demo.

Timeline: 2-3 months

Deliverables:

• A working demo application for issuing a residence permit using the thresholdized signature scheme.
• A presentation and documentation explaining the use case and demonstrating the application's functionality.

Overall Project Timeline: Approximately 9-12 months

>Building upon the previous milestones the final milestone leads to a practical demonstration of the thresholdized signature scheme's capabilities in a real-world application. This plan aligns with the goal of enhancing the security and functionality of Atala PRISM through innovative cryptographic solutions.

Who is in the project team and what are their roles?

Hendrik Amler - Project Management

Dr. Ilja Bytschok - Edler von Hoessle - Senior Developer

Philipp Lehwalder - Developer and Researcher

Prof. Sebastian Faust - Chief Scientist, Head of Research

PolyCrypt has been developing off-chain protocols and frameworks since 2018. Our research lead, Sebastian Faust (Prof. for Computer Science at TU Darmstadt, Germany), is a co-inventor of state channels, Proof of Space, and the CommiTEE sidechain.

We have already successfully completed our project “Perun Channels for Cardano” in F8 (<https://cardano.ideascale.com/c/idea/400079>) and therefore have gained considerable expertise developing software for the Cardano ecosystem. More specifically:

• Wallet server: <https://github.com/perun-network/perun-cardano-wallet>
• Payment Channel contracts repo: <https://github.com/perun-network/perun-cardano-contract>
• Perun Backend for Cardano repo: <https://github.com/perun-network/perun-cardano-backend>
• Cardano Devnet environment to test Perun Channels: <https://github.com/perun-network/cardano-devnet>

Please provide a cost breakdown of the proposed work and resources.

Budget and Costs:

Role [Hourly Rate in ADA]

Project Management and Communication [143ADA/h]

Senior-Developer [202 ADA/h]

Developer [131 ADA/h]

Researcher [262 ADA/h]

Modul1: Research on thresholdizing Signature Schemes and developing a Security Proof

Duration: 2 months

Effort:

Roles: PM / Sen-Dev / Dev / Researcher

Hours: 32 / 64 / 64 /64

ADA: 4,571.43 / 12,952.38/ 8,380.951 / 6,761.90

Sum in ADA: 42,666.67

Modul2 : Implementing Thresholdized Signature Schemes in Apollo

Duration: 5 months

Effort:

Roles: PM / Sen-Dev / Dev / Researcher

Hours: 120 / 160 / 160/ 40.00

ADA : 17,142.86 / 32,380.95 / 20,952.38 / 10,476.19

Sum in ADA: 80,952.38

Modul3: Building a Demo for Issuing a Residence Permit

Duration: 3 months

Effort:

Roles: PM / Sen-Dev / Dev / Researcher

Hours: 96 / 48 / 144 / 0

ADA: 13,714.29 / 9,714.29 / 18,857.14 / 0.00

Sum in ADA: 42,285.71

**<u>Total Sum in ADA: </u>**165,904.76

How does the cost of the project represent value for money for the Cardano ecosystem?

Secure and user-friendly wallet recovery options will prevent the loss of funds due to various reasons, such as lost keys or accidental deletions.A seamless wallet recovery experience will encourage more users to adopt Cardano, contributing to its growth and long-term sustainability.This ensures that the investment made in the project will continue to provide value as the blockchain ecosystem evolves.