12 September 2024
Ethereum Open Group Tasks L2 Requirements Working Group
Vitalik Buterin recognized three essential transitions for Ethereum: scaling via L2 rollups to scale back prices, enhancing pockets safety through good contract wallets for higher safety and consumer expertise, and advancing privateness via privacy-preserving mechanisms. This text explores how integrating W3C Decentralized Identifiers (DIDs) and Verifiable Credentials (VCs) can handle a few of these challenges by bettering the administration of identities, keys, and addresses, leveraging present decentralized identification 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, significantly his Three Transitions article, Ethereum is transitioning from a younger experimental expertise right into a mature tech stack that might carry an open, international, and permissionless expertise to common customers. Nonetheless, he believes that there are three main technical transitions that the stack must bear, roughly concurrently:
- L2 Scaling Transition: This includes 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 critical for enhanced consumer consolation and safety in storing funds and non-financial property, shifting away from centralized exchanges and single non-custodial wallets.
- Privateness Transition: Guaranteeing privacy-preserving funds transfers and growing different privacy-preserving mechanisms akin to social restoration and identification methods is important to stop customers from resorting to centralized options that provide 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 methods, 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 perspective – UX determines success or failure regardless of how good the underlying expertise is.
On this article, we are going to delve into these latter points and focus on how options from one other ecosystem, specifically the one centered on decentralized identification, additionally sometimes called self-sovereign identification, can considerably help 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 based on Vitalik:
- Complicated Funds: The transitions make easy actions like paying somebody extra complicated, requiring extra info than simply an handle as a result of the consumer wants to find out which funds to make use of, the place to ship it to, and particular cost directions typically involving identification info.
- Sensible Contract Wallets: Sensible Contract wallets add technical points that have to be addressed, akin to making certain wallets monitor ETH despatched by good contract code together with monitoring throughout networks.
- Privateness Challenges: Privateness-preserving transactions, if applied, introduce new challenges, akin to needing a “spending public key” and encrypted info for the recipient to seek out the cost and learn how to decide it up.
- Identification Adjustments: The idea of an “handle” will change, doubtlessly requiring a mix of a number of addresses, encryption keys, and different information to work together with a consumer.
These factors, subsequently, elevate the query of how we handle identification, addresses, and their keys collectively, and in a means that doesn’t confuse the consumer, and compromise the safety of their property.
Given the above downside assertion, the idea of an “handle” within the Ethereum ecosystem, is evolving, with the standard thought of an handle as a single cryptographic identifier turning into out of date. As an alternative, “directions for learn how to 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 attainable method could be utilizing the Ethereum Identify Service (ENS) data to include all identification info. Sending somebody an ENS title like “alice.eth” would enable them to entry all the required particulars for interplay, together with cost and privacy-preserving strategies. Nonetheless, this technique has drawbacks, akin to tying an excessive amount of to at least one’s title 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’s not equitable and doesn’t assure continued possession of 1’s identification; that’s not a tenable state of affairs. An alternate resolution includes keystore contracts that maintain all identification info. These contracts will be counterfactual-friendly and usually are 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 function with good contract wallets and account abstraction the place the controlling handle of a wise contract pockets may change as a result of a secret is rotated or recovered which necessitates a brand new controlling handle. No matter key rotation or key restoration, the standard technique could be to run onchain-procedures on every handle individually. That is impractical resulting from gasoline 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 is able to 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, akin to encrypted pointers and zk proofs, will increase complexity. Nonetheless, it affords potential synergies with keystore contracts for persistent addresses because the persistent handle may very well be “cloaked” in a zk proof.
What does this all imply for good contract wallets? Historically, wallets had 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 may very well be safely disclosed with none danger. Nonetheless, in a zero-knowledge world wallets want to guard information in addition to property. The instance of Zupass, a ZK-SNARK-based identification system, illustrates that customers can maintain information domestically and solely reveal it when needed. Nonetheless, dropping the info’s encryption key means dropping entry to all encrypted information. Due to this fact, the administration of encryption keys can 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 chance of dropping encryption keys. Nonetheless, this method will not be appropriate for asset restoration because of the potential danger of collusion amongst “guardians”. Lastly, the idea of an handle as a consumer’s on-chain identifier should change, and, subsequently, wallets should handle each asset restoration and encryption key restoration to keep away from overwhelming customers with complicated restoration processes aka poor UX. For instance, Signal In With Ethereum depends on the onchain handle and the consumer’s non-public key controlling that key to generate the authentication message. Nonetheless, there isn’t any notion of a one-to-many relationship on this method, and no notion of a wise contract pockets as the first delegate of the consumer. The verifying occasion, additionally referred to as the relying occasion, subsequently, can’t assess the scope of the authorization(s) required for the consumer when logging by which is essential relying on the performance the verifying occasion makes obtainable to the consumer handle.
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 identification, 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 obtainable that may very well be utilized by the neighborhood, particularly concerning identification, key administration, and privateness to ease the transitions? The reply to that may be a particular sure. Particularly, the ecosystem that has advanced across the idea of decentralized identification 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 identification ecosystem is concentrated 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 identification 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 allows verifiable, self-sovereign digital identities. They’re distinctive, globally resolvable identifiers related to a topic, akin to a person, group, or system. 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 appearing 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 identification and carry out particular licensed actions akin to assertions, authentication, authorization, and encryption.
Verifiable Credentials are digital credentials that include claims a few topic’s identification, attributes, or {qualifications}, issued by trusted entities often known as issuers. VCs are tamper-evident and cryptographically signed to make sure their integrity and authenticity. Importantly, VCs are moveable and will be offered by the topic to verifiers, akin to service suppliers or relying events, with out the necessity for these verifiers to contact the issuer immediately. This allows seamless and privacy-preserving identification verification throughout totally different domains and contexts.
A number of key gamers and organizations are contributing to the event and adoption of decentralized identification applied sciences:
- Decentralized Identification Basis (DIF): DIF is a consortium of organizations collaborating to develop requirements and protocols for decentralized identification methods. It promotes interoperability and innovation within the house.
- World Huge Internet Consortium (W3C): W3C hosts the Credentials Group 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 below the Linux Basis. It’s centered on offering instruments and libraries for constructing decentralized identification methods.
- Sovrin Basis: Sovrin Basis operates the Sovrin Community, a public permissioned blockchain designed for decentralized identification administration.
- Microsoft, IBM, and different tech firms: A number of main tech firms are actively concerned in growing decentralized identification options, contributing to requirements improvement, and constructing reference implementations.
Requirements play an important position in making certain interoperability and compatibility throughout the decentralized identification 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 Knowledge 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, akin to DID Auth, Presentation Trade, and VC API, facilitate safe interactions and transactions throughout the self-sovereign identification paradigm.
- Hyperledger Aries: A framework that gives a set of interoperable parts for constructing decentralized identification 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 purposes within the Web3. It focuses on decentralized identification, giving customers management over their information. The toolkit relies 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 identification framework will be efficiently utilized to the cross-network challenges for identification, handle, and key administration beforehand mentioned.
Utilizing Decentralized Identifiers (DIDs)
Downside: Managing identification for a consumer throughout numerous Ethereum networks is complicated.
DID Answer for Identities:
- DIDs present globally distinctive identifiers which might be resolvable (to their DID Doc) and cryptographically verifiable throughout any blockchain community.
- Every DID is related to a DID Doc which accommodates details about the connection of a DID with a set of cryptographic keys, the features these keys can carry out akin to verification, authentication, authorization, assertion, and encryption, in addition to service endpoints akin 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, making certain tamper-proof and protracted identification data.
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 akin to secp256k1 utilized by Ethereum stacks.
- The verificationMethod for a key additionally permits the consumer to specify an ID for the verification technique. 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 will not be on an Ethereum community. As well as, the fragment will be prolonged to point if the important thing belongs to a counterfactual handle 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 handle. As well as, if required for sure causes to individually establish an handle 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 wise 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 Answer for Identities:
Downside: Key restoration and key rotation for Ethereum addresses, significantly good contract wallets, are complicated and usually are not user-friendly.
DID Doc resolution:
- When a public key related to a DID have to be rotated for safety or restoration functions, a consumer can merely replace a DID Doc and exchange the previous public key with a brand new public key within the verificationMethod utilizing one other controlling key. This generally is a key the consumer immediately controls, or if management has been delegated, by one other consumer controlling a DID listed as controller.
- Due to this fact, this can 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 consumer can produce a cryptographic dedication that the replace was carried out accurately that may be submitted to and verified by the good contract pockets.
Privateness (Zero-Information) Side 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 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 sound key rotation replace of a DID doc would do two issues: a) confirm that the updating secret is 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 foundation 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 foundation 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 need to confirm the proof, verify 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 handle submitting the transaction is a controlling key of the DID that may 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 akin 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 Answer for Compliant Key Operations:
- W3C VCs enable assertions to be made concerning the topic of the credential akin to “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 recordsdata that specify the VC normal 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 identification of the VC issuer as the foundation of belief, akin to a KYC supplier.
- Such zk proofs, particularly, ZK-SNARKs will be submitted with any transaction and verified in a wise contract akin to a wise contract pockets or a DeFi protocol.
- This enables for compliant transactions on Ethereum stacks with out revealing any delicate identification 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 usually are not as scalable as needed, 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 high of any occasion anchoring system, together with Ethereum, and is compliant with W3C tips. 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 well, 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 certain that every consumer has a self-sovereign identification, that’s each non-public and interoperable throughout totally different L2s and purposes.
We imagine that the combination of W3C DIDs and VCs into Ethereum’s infrastructure is essential for navigating the upcoming transitions. They supply the required instruments for managing identities, keys, and handle safety, and privateness, and are aligned with the decentralized nature of blockchain expertise.
Sadly, the Ethereum ecosystem and the decentralized identification (DID) ecosystem haven’t intersected a lot, although each share a deal with 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. In consequence, 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 Identification and Ethereum ecosystems.
Acknowledgments
Particular thanks go to Eugenio Reggianini ([email protected]) for proofreading the manuscript and including vital content material.