12 September 2024
Ethereum Open Neighborhood Tasks L2 Requirements Working Group
Vitalik Buterin recognized three essential transitions for Ethereum: scaling via L2 rollups to scale back prices, enhancing pockets safety by way of good contract wallets for higher safety and person expertise, and advancing privateness via privacy-preserving mechanisms. This text explores how integrating W3C Decentralized Identifiers (DIDs) and Verifiable Credentials (VCs) can deal with 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 collection of 2023 articles, notably his Three Transitions article, Ethereum is transitioning from a younger experimental know-how right into a mature tech stack that would deliver an open, world, and permissionless expertise to common customers. Nevertheless, he believes that there are three main technical transitions that the stack must bear, roughly concurrently:
- L2 Scaling Transition: This entails shifting the ecosystem to rollups to handle 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 critical for enhanced person consolation and safety in storing funds and non-financial property, shifting away from centralized exchanges and single non-custodial wallets.
- Privateness Transition: Making certain privacy-preserving funds transfers and growing different privacy-preserving mechanisms reminiscent of social restoration and id programs is important to stop 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, fee programs, and key administration processes. The connection between customers and their addresses, and key rotation/restoration are a serious concern each technically and from a usability standpoint – UX determines success or failure irrespective of how good the underlying know-how is.
On this article, we’ll delve into these latter points and talk about how options from one other ecosystem, particularly the one centered on decentralized id, additionally also known as 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 may be summarized as follows in line with Vitalik:
- Advanced Funds: The transitions make easy actions like paying somebody extra advanced, requiring extra info than simply an deal with as a result of the person wants to find out which funds to make use of, the place to ship it to, and particular fee directions usually involving id info.
- Sensible Contract Wallets: Sensible Contract wallets add technical points that must be addressed, reminiscent of guaranteeing wallets monitor ETH despatched by good contract code together with monitoring throughout networks.
- Privateness Challenges: Privateness-preserving transactions, if applied, introduce new challenges, reminiscent of needing a “spending public key” and encrypted info for the recipient to search out the fee and how one can decide it up.
- Identification Modifications: The idea of an “deal with” will change, doubtlessly requiring a mixture of a number of addresses, encryption keys, and different knowledge to work together with a person.
These factors, due to this fact, elevate the query of how we handle id, addresses, and their keys collectively, and in a means that doesn’t confuse the person, and compromise the safety of their property.
Given the above downside assertion, the idea of an “deal with” within the Ethereum ecosystem, is evolving, with the standard concept of an deal with as a single cryptographic identifier turning into out of date. As an alternative, “directions for how one can work together with me” will contain a mixture of addresses on a number of Layer 2 (L2) platforms, stealth meta-addresses, encryption keys, and different knowledge. In his article, Vitalik factors out that one doable method could be utilizing the Ethereum Identify Service (ENS) information to include all id info. Sending somebody an ENS identify like “alice.eth” would enable them to entry all the mandatory particulars for interplay, together with fee and privacy-preserving strategies. Nevertheless, this methodology has drawbacks, reminiscent of tying an excessive amount of to at least one’s identify and the lack to have trustless counterfactual names, that are important for sending tokens to new customers with out a prior blockchain interplay. As well as, the ENS system is a rent-seeking system. Due to this fact, extra broadly, it isn’t 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 may be counterfactual-friendly and are usually not tied to a selected identify, 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 necessary characteristic with good contract wallets and account abstraction the place the controlling deal with of a wise contract pockets would possibly change as a result of a key’s rotated or recovered which necessitates a brand new controlling deal with. Regardless of key rotation or key restoration, the standard methodology could be to run onchain-procedures on every deal with individually. That is impractical as a result of fuel prices, counterfactual addresses, and privateness considerations. 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 might 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 via a selected validation module and embeds a system to standardize onchain executions.
Including privateness measures, reminiscent of encrypted pointers and zk proofs, will increase complexity. Nevertheless, it presents potential synergies with keystore contracts for persistent addresses for the reason that persistent deal with could possibly be “cloaked” in a zk proof.
What does this all imply for good contract wallets? Historically, wallets have been designed to safe property by defending the non-public key related to on-chain property. If the important thing was to be modified, the previous one could possibly be safely disclosed with none danger. Nevertheless, in a zero-knowledge world wallets want to guard knowledge moreover property. The instance of Zupass, a ZK-SNARK-based id system, illustrates that customers can maintain knowledge domestically and solely reveal it when essential. Nevertheless, dropping the information’s encryption key means dropping entry to all encrypted knowledge. Due to this fact, the administration of encryption keys can be turning into more and more necessary. Vitalik means that a number of units or secret sharing amongst (key) “guardians” could possibly be used to mitigate the chance of dropping encryption keys. Nevertheless, this method shouldn’t be appropriate for asset restoration because of the potential danger of collusion amongst “guardians”. Lastly, the idea of an deal with as a person’s on-chain identifier should change, and, due to this fact, 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 deal with and the person’s non-public key controlling that key to generate the authentication message. Nevertheless, there isn’t a notion of a one-to-many relationship on this method, and no notion of a wise contract pockets as the first delegate of the person. The verifying occasion, additionally known as the relying occasion, due to this fact, can not assess the scope of the authorization(s) required for the person when logging wherein is essential relying on the performance the verifying occasion makes accessible to the person deal with.
The Three Transitions are extra than simply technical enhancements; they signify radical shifts in how customers have interaction 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 value. Due to this fact, one would naturally ask the next query: Are there instruments and frameworks already accessible that could possibly be utilized by the neighborhood, particularly concerning 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 throughout the Ethereum stack.
What’s the Decentralized Identification Ecosystem?
The decentralized id ecosystem is concentrated on giving people management over their digital identities with out counting on centralized authorities. It leverages blockchain know-how 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, reminiscent of 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 an alternative, 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 reminiscent of assertions, authentication, authorization, and encryption.
Verifiable Credentials are digital credentials that include 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 moveable and may be introduced by the topic to verifiers, reminiscent of service suppliers or relying events, with out the necessity for these verifiers to contact the issuer straight. This permits 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 Identification Basis (DIF): DIF is a consortium of organizations collaborating to develop requirements and protocols for decentralized id programs. It promotes interoperability and innovation within the area.
- World Huge Internet 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 undertaking beneath the Linux Basis. It’s centered on offering instruments and libraries for constructing decentralized id programs.
- 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 a vital function in guaranteeing interoperability and compatibility throughout the decentralized id ecosystem. Some key requirements and reference implementations embody:
- Decentralized Identifier (DID) Specification: Defines the syntax and semantics of DIDs, together with strategies for his or her creation, decision, and administration.
- Verifiable Credentials Information Mannequin: Specifies the construction and format of verifiable credentials, together with JSON-LD contexts for representing claims.
- DIDComm Messaging Protocol: Permits safe, non-public communication between DIDs utilizing end-to-end encryption and cryptographic authentication.
- SSI (Self-Sovereign Identification) Protocols: Numerous protocols and frameworks, reminiscent of DID Auth, Presentation Alternate, and VC API, facilitate safe interactions and transactions throughout 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 knowledge. The toolkit relies on the open-sourced iden3 protocol.
- QuarkID: An open-source DID resolution at present deployed on ZKsync Period with digital credentials being issued by the Metropolis of Buenos Aires.
Beneath, we element how a decentralized id framework may be efficiently utilized to the cross-network challenges for id, deal with, 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 capabilities these keys can carry out reminiscent of verification, authentication, authorization, assertion, and encryption, in addition to service endpoints reminiscent of 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 may be saved on any blockchain community, guaranteeing tamper-proof and protracted id information.
DID Paperwork for Tackle 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 knowledge property permitting a DID proprietor or controller to specify symmetric and uneven cryptographic keys for any desired curve reminiscent of 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 means that you can specify a community identifier, for instance, “1” if the secret is an Ethereum key, and different numbers if that key shouldn’t be on an Ethereum community. As well as, the fragment may be prolonged to point if the important thing belongs to a counterfactual deal with or a wise contract pockets. For instance, “did:ion:1234xxxxddd4444-#1-counter” would point out that the general public key recognized belongs to a counterfactual Ethereum deal with. As well as, if required for sure causes to individually determine an deal with on Polygon PoS vs Arbitrum One the “1” could possibly be changed by the chainId of the goal community, e.g. 137 for Polygon PoS.
- Lastly, a wise contract pockets may 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, notably good contract wallets, are advanced and are usually not user-friendly.
DID Doc resolution:
- When a public key related to a DID have to be rotated for safety or restoration functions, a person can merely replace a DID Doc and substitute the previous public key with a brand new public key within the verificationMethod utilizing one other controlling key. This generally is a key the person straight controls, or if management has been delegated, by one other person controlling a DID listed as controller.
- Due to this fact, this will also be achieved for a Sensible 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 performed accurately that may be submitted to and verified by the good contract pockets.
Privateness (Zero-Information) Side of DIDs and DID Paperwork
- DID Paperwork may 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 via a number of cryptographic keys).
- Utilizing zk-SNARKs, particularly, allows 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 could 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 could be the Merkle proof and the digital signature. The good contract would solely should 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 could possibly 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 deal with 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 proper 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 reminiscent of 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 in regards to the topic of the credential reminiscent of “Alice is a authorized enterprise in Brazil”, or, “This enterprise is a authorized entity within the US and a registered Dealer-Vendor”, or, “The authorized US entity A is a legally registered Dealer-Vendor and is legally licensed to behave on behalf of the authorized US entity B”.
- Given the standardized construction and public context reference information that specify the VC customary and particular VC varieties, every VC may be readily became a zk proof given a standardized, and publicly accessible zk circuit. Revealing solely the authorized id of the VC issuer as the basis of belief, reminiscent of a KYC supplier.
- Such zk proofs, particularly, ZK-SNARKs may be submitted with any transaction and verified in a wise contract reminiscent of a wise contract pockets or a DeFi protocol.
- This enables for compliant transactions on Ethereum stacks with out revealing any delicate id or different related compliance knowledge.
Helpful Implementations for Ethereum Networks
There are dozens of various implementations of the W3C DID specification. Whereas many DID strategies are usually not as scalable as essential, 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 based mostly 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 Information Varieties (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 make 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 deal with safety, and privateness, and are aligned with the decentralized nature of blockchain know-how.
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 know-how, 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 vary this and begin a more in-depth collaboration between the Decentralized Identification and Ethereum ecosystems.
Acknowledgments
Particular thanks go to Eugenio Reggianini ([email protected]) for proofreading the manuscript and including necessary content material.
