12 September 2024
Ethereum Open Neighborhood Tasks L2 Requirements Working Group
Vitalik Buterin recognized three essential transitions for Ethereum: scaling by way of L2 rollups to cut back prices, enhancing pockets safety by way of good contract wallets for higher safety and person expertise, and advancing privateness by way of privacy-preserving mechanisms. This text explores how integrating W3C Decentralized Identifiers (DIDs) and Verifiable Credentials (VCs) can tackle a few of these challenges by enhancing the administration of identities, keys, and addresses, leveraging current decentralized id options to help Ethereum’s transitions effectively to maneuver to a extra L2-based world.
As Vitalik Buterin identified in a sequence of 2023 articles, significantly his Three Transitions article, Ethereum is transitioning from a younger experimental expertise right into a mature tech stack that would carry an open, world, and permissionless expertise to common customers. Nevertheless, he believes that there are three main technical transitions that the stack must endure, roughly concurrently:
L2 Scaling Transition: This entails shifting the ecosystem to rollups to deal with the excessive transaction prices on Ethereum, which have reached $3.75 and even $82.48 throughout a bull run
Pockets Safety Transition: The shift to good contract wallets (account abstraction) is important for enhanced person consolation and safety in storing funds and non-financial belongings, shifting away from centralized exchanges and single non-custodial wallets.
Privateness Transition: Guaranteeing privacy-preserving funds transfers and growing different privacy-preserving mechanisms similar to social restoration and id techniques is important to forestall customers from resorting to centralized options that supply just some or just about no privateness.
Vitalik emphasizes that these transitions are essential and difficult because of the intense coordination required to implement them. Particularly, he mentioned the implications of those transitions on the connection between customers and addresses, cost techniques, and key administration processes. The connection between customers and their addresses, and key rotation/restoration are a significant concern each technically and from a usability perspective – UX determines success or failure regardless of how good the underlying expertise is.
On this article, we’ll delve into these latter points and talk about how options from one other ecosystem, specifically the one centered on decentralized id, additionally sometimes called self-sovereign id, can considerably support with the transitions with out having to reinvent too many wheels.
The issue assertion within the context of Ethereum’s technical transitions will be summarized as follows in line with Vitalik:
Complicated Funds: The transitions make easy actions like paying somebody extra advanced, requiring extra info than simply an tackle as a result of the person wants to find out which funds to make use of, the place to ship it to, and particular cost directions typically involving id info.
Good Contract Wallets: Good Contract wallets add technical points that have to be addressed, similar to guaranteeing wallets observe ETH despatched by good contract code together with monitoring throughout networks.
Privateness Challenges: Privateness-preserving transactions, if applied, introduce new challenges, similar to needing a “spending public key” and encrypted info for the recipient to search out the cost and how one can decide it up.
Id Adjustments: The idea of an “tackle” will change, doubtlessly requiring a mix of a number of addresses, encryption keys, and different information to work together with a person.
These factors, subsequently, increase the query of how we handle id, addresses, and their keys collectively, and in a method that doesn’t confuse the person, and compromise the safety of their belongings.
Given the above drawback assertion, the idea of an “tackle” within the Ethereum ecosystem, is evolving, with the standard thought of an tackle as a single cryptographic identifier turning into out of date. As a substitute, “directions for how one can work together with me” will contain a mix of addresses on a number of Layer 2 (L2) platforms, stealth meta-addresses, encryption keys, and different information. In his article, Vitalik factors out that one potential strategy can be utilizing the Ethereum Identify Service (ENS) information to comprise all id info. Sending somebody an ENS title like “alice.eth” would enable them to entry all the mandatory particulars for interplay, together with cost and privacy-preserving strategies. Nevertheless, this methodology has drawbacks, similar to tying an excessive amount of to 1’s title and the lack to have trustless counterfactual names, that are important for sending tokens to new customers with no prior blockchain interplay. As well as, the ENS system is a rent-seeking system. Due to this fact, extra broadly, it’s not equitable and doesn’t assure continued possession of 1’s id; that isn’t a tenable state of affairs. Another resolution entails keystore contracts that maintain all id info. These contracts will be counterfactual-friendly and should not tied to a selected title, permitting for extra flexibility and privateness.
This brings us to the subject of keys controlling “addresses”. Particularly, key rotation and key restoration in a multi-address Ethereum Ecosystem. Key rotation is simply turning into an vital characteristic with good contract wallets and account abstraction the place the controlling tackle of a sensible contract pockets may change as a result of a key’s rotated or recovered which necessitates a brand new controlling tackle. Regardless of key rotation or key restoration, the standard methodology can be to run onchain-procedures on every tackle individually. That is impractical because of gasoline prices, counterfactual addresses, and privateness issues. As talked about earlier than, Vitalik proposes the utilization of keystore contracts that exist in a single location and level to verification logic at totally different addresses. This may enable the creation of a proof of the present spending key for transactions. This requires a restoration structure that separates verification logic and asset holdings, simplifying the restoration course of by requiring solely a cross-network proof for restoration.
On this context, Decentralized Identifiers can leverage keystore contracts to empower a modular verification logic for contract accounts that verifies zk proofs by way of a selected validation module and embeds a system to standardize onchain executions.
Including privateness measures, similar to encrypted pointers and zk proofs, will increase complexity. Nevertheless, it affords potential synergies with keystore contracts for persistent addresses because the persistent tackle may very well be “cloaked” in a zk proof.
What does this all imply for good contract wallets? Historically, wallets have been designed to safe belongings by defending the non-public key related to on-chain belongings. If the important thing was to be modified, the previous one may very well be safely disclosed with none danger. Nevertheless, in a zero-knowledge world wallets want to guard information in addition to belongings. The instance of Zupass, a ZK-SNARK-based id system, illustrates that customers can maintain information regionally and solely reveal it when crucial. Nevertheless, dropping the information’s encryption key means dropping entry to all encrypted information. Due to this fact, the administration of encryption keys can also be turning into more and more vital. Vitalik means that a number of units or secret sharing amongst (key) “guardians” may very well be used to mitigate the danger of dropping encryption keys. Nevertheless, this strategy isn’t appropriate for asset restoration because of the potential danger of collusion amongst “guardians”. Lastly, the idea of an tackle as a person’s on-chain identifier must change, and, subsequently, wallets should handle each asset restoration and encryption key restoration to keep away from overwhelming customers with advanced restoration processes aka poor UX. For instance, Signal In With Ethereum depends on the onchain tackle and the person’s non-public key controlling that key to generate the authentication message. Nevertheless, there isn’t any notion of a one-to-many relationship on this strategy, and no notion of a sensible contract pockets as the first delegate of the person. The verifying occasion, additionally referred to as the relying occasion, subsequently, can not assess the scope of the authorization(s) required for the person when logging through which is essential relying on the performance the verifying occasion makes obtainable to the person tackle.
The Three Transitions are extra than simply technical enhancements; they symbolize radical shifts in how customers interact with Ethereum-based stacks, particularly within the areas of id, key administration, and addresses, thereby, evolving the Ethereum ecosystem from its present state right into a extra user-friendly and accessible platform that prioritizes scalability, safety, and usefulness. Due to this fact, one would naturally ask the next query: Are there instruments and frameworks already obtainable that may very well be utilized by the group, particularly relating to id, key administration, and privateness to ease the transitions? The reply to that could be a particular sure. Particularly, the ecosystem that has developed across the idea of decentralized id and its requirements, frameworks, and quite a few reference implementations has produced tooling that’s readily usable inside the Ethereum stack.
What’s the Decentralized Id Ecosystem?
The decentralized id ecosystem is targeted on giving people management over their digital identities with out counting on centralized authorities. It leverages blockchain expertise and cryptographic ideas to make sure privateness, safety, and user-centric id administration. On the core of this ecosystem are two key ideas: Decentralized Identifiers (DIDs) and Verifiable Credentials (VCs).
Decentralized Identifiers (DIDs):
DIDs are a brand new sort of identifier that permits verifiable, self-sovereign digital identities. They’re distinctive, globally resolvable identifiers related to a topic, similar to a person, group, or gadget. DIDs are decentralized by design, that means they don’t depend on a central registry or authority for his or her creation or administration. As a substitute, they’re created and managed by the customers or entities performing on their behalf. DIDs sometimes make the most of public-key cryptography to make sure safe interactions and permit the topic to show possession and management of their id and carry out particular licensed actions similar to assertions, authentication, authorization, and encryption.
Verifiable Credentials (VCs):
Verifiable Credentials are digital credentials that comprise claims a couple of topic’s id, attributes, or {qualifications}, issued by trusted entities often called issuers. VCs are tamper-evident and cryptographically signed to make sure their integrity and authenticity. Importantly, VCs are transportable and will be offered by the topic to verifiers, similar to service suppliers or relying events, with out the necessity for these verifiers to contact the issuer immediately. This allows seamless and privacy-preserving id verification throughout totally different domains and contexts.
A number of key gamers and organizations are contributing to the event and adoption of decentralized id applied sciences:
Decentralized Id Basis (DIF): DIF is a consortium of organizations collaborating to develop requirements and protocols for decentralized id techniques. It promotes interoperability and innovation within the area.
World Vast Net Consortium (W3C): W3C hosts the Credentials Neighborhood Group, which incubates work on verifiable credentials and associated applied sciences, and the Decentralized Identifier and Verifiable Credentials Working Teams, that are growing updates to the respective specs
Hyperledger Indy: Hyperledger Indy is an open-source mission beneath the Linux Basis. It’s centered on offering instruments and libraries for constructing decentralized id techniques.
Sovrin Basis: Sovrin Basis operates the Sovrin Community, a public permissioned blockchain designed for decentralized id administration.
Microsoft, IBM, and different tech corporations: A number of main tech corporations are actively concerned in growing decentralized id options, contributing to requirements improvement, and constructing reference implementations.
Requirements play an important function in guaranteeing interoperability and compatibility inside the decentralized id ecosystem. Some key requirements and reference implementations embrace:
Decentralized Identifier (DID) Specification: Defines the syntax and semantics of DIDs, together with strategies for his or her creation, decision, and administration.
Verifiable Credentials Knowledge Mannequin: Specifies the construction and format of verifiable credentials, together with JSON-LD contexts for representing claims.
DIDComm Messaging Protocol: Allows safe, non-public communication between DIDs utilizing end-to-end encryption and cryptographic authentication.
SSI (Self-Sovereign Id) Protocols: Varied protocols and frameworks, similar to DID Auth, Presentation Trade, and VC API, facilitate safe interactions and transactions inside the self-sovereign id paradigm.
Hyperledger Aries: A framework that gives a set of interoperable parts for constructing decentralized id options, together with brokers, wallets, and protocols.
Privado ID former Polygon ID: A set of instruments constructed for builders to create safe and trusted relationships between customers and functions within the Web3. It focuses on decentralized id, giving customers management over their information. The toolkit is predicated on the open-sourced iden3 protocol.
QuarkID: An open-source DID resolution presently deployed on ZKsync Period with digital credentials being issued by the Metropolis of Buenos Aires.
Under, we element how a decentralized id framework will be efficiently utilized to the cross-network challenges for id, tackle, and key administration beforehand mentioned.
Utilizing Decentralized Identifiers (DIDs)
Downside: Managing id for a person throughout varied Ethereum networks is advanced.
DID Resolution for Identities:
DIDs present globally distinctive identifiers which can be resolvable (to their DID Doc) and cryptographically verifiable throughout any blockchain community.
Every DID is related to a DID Doc which incorporates details about the connection of a DID with a set of cryptographic keys, the features these keys can carry out similar to verification, authentication, authorization, assertion, and encryption, in addition to service endpoints similar to API endpoints to addresses managed by the keys listed within the DID Doc.
The connection of DID to their DID Paperwork or respective cryptographic representations will be saved on any blockchain community, guaranteeing tamper-proof and protracted id information.
DID Paperwork for Deal with Administration:
Downside: Customers have totally different addresses on the Ethereum mainnet, testnets, and Layer 2 options, together with counterfactual addresses.
DID Doc resolution:
A DID doc has a verificationMethod information property permitting a DID proprietor or controller to specify symmetric and uneven cryptographic keys for any desired curve similar to secp256k1 utilized by Ethereum stacks.
The verificationMethod for a key additionally permits the person to specify an ID for the verification methodology. That is sometimes the DID plus a fraction as per the DID specification. This fragment permits two crucial issues. First, it lets you specify a community identifier, for instance, “1” if the bottom line is an Ethereum key, and different numbers if that key isn’t on an Ethereum community. As well as, the fragment will be prolonged to point if the important thing belongs to a counterfactual tackle or a sensible contract pockets. For instance, “did:ion:1234xxxxddd4444-#1-counter” would point out that the general public key recognized belongs to a counterfactual Ethereum tackle. As well as, if required for sure causes to individually determine an tackle on Polygon PoS vs Arbitrum One the “1” may very well be changed by the chainId of the goal community, e.g. 137 for Polygon PoS.
Lastly, a sensible contract pockets will be given its personal DID and managed by the DIDs of the good contract pockets house owners the place every proprietor identifies a number of controlling keys for the pockets as specified of their DID doc. This final level permits for 2 main enhancements for good contract wallets – key rotation aka key restoration, and an arbitrary variety of controlling keys with out revealing these controlling keys
DID Paperwork for Key Administration together with Social Restoration:
DID Resolution for Identities:
Downside: Key restoration and key rotation for Ethereum addresses, significantly good contract wallets, are advanced and should not user-friendly.
DID Doc resolution:
When a public key related to a DID should be rotated for safety or restoration functions, a person can merely replace a DID Doc and change the previous public key with a brand new public key within the verificationMethod utilizing one other controlling key. This is usually a key the person immediately controls, or if management has been delegated, by one other person controlling a DID listed as controller.
Due to this fact, this can be achieved for a Good Contract pockets. Every controller can independently replace the important thing within the verificationMethod related to their DID. That is sufficient as a result of the person can produce a cryptographic dedication that the replace was achieved appropriately that may be submitted to and verified by the good contract pockets.
Privateness (Zero-Information) Facet of DIDs and DID Paperwork
DID Paperwork will be represented as zero-knowledge proofs by first merkelizing their JSON-LD doc, after which verifying Merkle Proofs of relationships of DID-to-key and DID-to-functional-capability (as represented by way of a number of cryptographic keys).
Utilizing zk-SNARKs, specifically, permits environment friendly verification of cryptographic key claims on Ethereum networks.
For instance, the zero-knowledge circuit for a legitimate key rotation replace of a DID doc would do two issues: a) confirm that the updating key’s within the DID doc and is a controlling key by verifying a Merkle proof of inclusion within the DID doc and b) confirm the digital signature of the controlling key over the basis hash of the previous DID doc. The general public inputs to the proof can be the Merkle Root of the brand new merkelized DID Doc and the basis hash of the previous DID doc, and the non-public inputs can be the Merkle proof and the digital signature. The good contract would solely must confirm the proof, examine that the previous root hash was registered, after which replace the previous with the brand new root hash.
This has the benefit that no info is leaked about which addresses management the good contract pockets. Each good contract pockets transaction may very well be totally nameless if all transactions submitted to the good contract have a recursive zero-knowledge proof that verifies {that a}) the general public key belonging to the tackle submitting the transaction is a controlling key of the DID that could be a good contract proprietor and b) {that a} zero-knowledge proof that the transaction was signed by the right quorum of signatures of the good contract pockets house owners was correctly verified by a verifier within the circuit itself.
Utilizing Verifiable Credentials (VCs)
Downside: The entity performing a key operation similar to a key rotation or a digital signature for a monetary transaction should show that it’s a authorized entity that meets all relevant compliance guidelines for a jurisdiction that has compliance oversight.
VC Resolution for Compliant Key Operations:
W3C VCs enable assertions to be made concerning the topic of the credential similar to “Alice is a authorized enterprise in Brazil”, or, “This enterprise is a authorized entity within the US and a registered Dealer-Supplier”, or, “The authorized US entity A is a legally registered Dealer-Supplier and is legally licensed to behave on behalf of the authorized US entity B”.
Given the standardized construction and public context reference recordsdata that specify the VC commonplace and particular VC sorts, every VC will be readily became a zk proof given a standardized, and publicly obtainable zk circuit. Revealing solely the authorized id of the VC issuer as the basis of belief, similar to a KYC supplier.
Such zk proofs, specifically, ZK-SNARKs will be submitted with any transaction and verified in a sensible contract similar to a sensible contract pockets or a DeFi protocol.
This enables for compliant transactions on Ethereum stacks with out revealing any delicate id or different related compliance information.
Helpful Implementations for Ethereum Networks
There are dozens of various implementations of the W3C DID specification. Whereas many DID strategies should not as scalable as crucial, or not simply anchored on a blockchain, a number of DID strategies match the invoice for the Ethereum ecosystem – permissionless, blockchain-anchored, scalable, and low-cost. All of those DID strategies are primarily based on the Sidetree Protocol. The Sidetree Protocol is a “Layer 2” DID protocol that may be applied on prime of any occasion anchoring system, together with Ethereum, and is compliant with W3C pointers. The Sidetree protocol doesn’t require centralized authorities, distinctive protocol tokens, reliable intermediaries, or secondary consensus mechanisms. Particularly, the Sidetree protocol defines a core set of DID PKI state change operations, structured as delta-based Battle-Free Replicated Knowledge Sorts (i.e. Create, Replace, Get better, or Deactivate), that mutate a Decentralized Identifier’s DID Doc state.
Due to this fact, by leveraging an Ethereum-based implementation of Sidetree, the Ethereum ecosystem can be sure that every person has a self-sovereign id, that’s each non-public and interoperable throughout totally different L2s and functions.
We consider that the mixing of W3C DIDs and VCs into Ethereum’s infrastructure is essential for navigating the upcoming transitions. They supply the mandatory instruments for managing identities, keys, and tackle safety, and privateness, and are aligned with the decentralized nature of blockchain expertise.
Sadly, the Ethereum ecosystem and the decentralized id (DID) ecosystem haven’t intersected a lot, although each share a give attention to decentralization. The Ethereum ecosystem has primarily targeting advancing and scaling its blockchain expertise, whereas the DID ecosystem has prioritized growing requirements and protocols for governing digital identities. Because of this, alternatives for collaboration between these two ecosystems have been restricted.
We see the Three Transitions as a chance to alter this and begin a more in-depth collaboration between the Decentralized Id and Ethereum ecosystems.
Acknowledgments
Particular thanks go to Eugenio Reggianini ([email protected]) for proofreading the manuscript and including vital content material.
