12 September 2024
Ethereum Open Group Tasks L2 Requirements Working Group
Vitalik Buterin recognized three essential transitions for Ethereum: scaling via L2 rollups to cut back prices, enhancing pockets safety through 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 handle a few of these challenges by bettering 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 expertise right into a mature tech stack that would carry an open, international, and permissionless expertise to common customers. Nonetheless, he believes that there are three main technical transitions that the stack must endure, 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 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 creating different privacy-preserving mechanisms equivalent to social restoration and id methods is important to forestall customers from resorting to centralized options that provide just some or nearly no privateness.
Vitalik emphasizes that these transitions are essential and difficult because of the intense coordination required to implement them. Specifically, he mentioned the implications of those transitions on the connection between customers and addresses, fee 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 irrespective of how good the underlying expertise is.
On this article, we are going to delve into these latter points and talk about how options from one other ecosystem, specifically the one targeted on decentralized id, additionally sometimes called self-sovereign id, 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 might be summarized as follows in keeping with Vitalik:
- Advanced Funds: The transitions make easy actions like paying somebody extra advanced, requiring extra data than simply an handle 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 typically involving id data.
- Good Contract Wallets: Good Contract wallets add technical points that have to be addressed, equivalent to guaranteeing wallets monitor ETH despatched by good contract code together with monitoring throughout networks.
- Privateness Challenges: Privateness-preserving transactions, if applied, introduce new challenges, equivalent to needing a “spending public key” and encrypted data for the recipient to seek out the fee and find out how to decide it up.
- Identification Modifications: 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 person.
These factors, subsequently, increase the query of how we handle id, addresses, and their keys collectively, and in a manner that doesn’t confuse the person, and compromise the safety of their belongings.
Given the above downside assertion, the idea of an “handle” within the Ethereum ecosystem, is evolving, with the normal concept of an handle as a single cryptographic identifier changing into out of date. As an alternative, “directions for find out 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 can be utilizing the Ethereum Identify Service (ENS) data to comprise all id data. 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. Nonetheless, this technique has drawbacks, equivalent to tying an excessive amount of to 1’s identify 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. Subsequently, extra broadly, it’s not equitable and doesn’t assure continued possession of 1’s id; that’s not a tenable scenario. An alternate answer includes keystore contracts that maintain all id data. These contracts might be counterfactual-friendly and usually are 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 changing into an necessary function with good contract wallets and account abstraction the place the controlling handle of a sensible contract pockets would possibly change as a result of a secret is rotated or recovered which necessitates a brand new controlling handle. Regardless of key rotation or key restoration, the normal technique can be to run onchain-procedures on every handle individually. That is impractical as a consequence of 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 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, equivalent to encrypted pointers and zk proofs, will increase complexity. Nonetheless, it affords potential synergies with keystore contracts for persistent addresses because the persistent handle could possibly be “cloaked” in a zk proof.
What does this all imply for good contract wallets? Historically, wallets had been designed to safe belongings by defending the personal key related to on-chain belongings. If the important thing was to be modified, the previous one could possibly be safely disclosed with none threat. Nonetheless, in a zero-knowledge world wallets want to guard information apart from belongings. The instance of Zupass, a ZK-SNARK-based id system, illustrates that customers can maintain information regionally and solely reveal it when essential. Nonetheless, shedding the info’s encryption key means shedding entry to all encrypted information. Subsequently, the administration of encryption keys can also be changing 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 shedding encryption keys. Nonetheless, this method isn’t appropriate for asset restoration because of the potential threat of collusion amongst “guardians”. Lastly, the idea of an handle 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 handle and the person’s personal 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 sensible contract pockets as the first delegate of the person. The verifying get together, additionally known as the relying get together, subsequently, can’t assess the scope of the authorization(s) required for the person when logging through which is essential relying on the performance the verifying get together makes out there to the person handle.
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. Subsequently, one would naturally ask the next query: Are there instruments and frameworks already out there that could possibly 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. Specifically, the ecosystem that has advanced 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 targeted on giving people management over their digital identities with out counting on centralized authorities. It leverages blockchain expertise and cryptographic rules 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 allows verifiable, self-sovereign digital identities. They’re distinctive, globally resolvable identifiers related to a topic, equivalent 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 usually 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 approved actions equivalent to assertions, authentication, authorization, and encryption.
Verifiable Credentials are digital credentials that comprise claims a couple of topic’s id, 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 transportable and might be introduced by the topic to verifiers, equivalent to service suppliers or relying events, with out the necessity for these verifiers to contact the issuer instantly. 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 methods. It promotes interoperability and innovation within the area.
- World Huge Net 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 creating updates to the respective specs
- Hyperledger Indy: Hyperledger Indy is an open-source challenge beneath the Linux Basis. It’s targeted on offering instruments and libraries for constructing decentralized id methods.
- 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 creating decentralized id options, contributing to requirements growth, 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 Knowledge Mannequin: Specifies the construction and format of verifiable credentials, together with JSON-LD contexts for representing claims.
- DIDComm Messaging Protocol: Permits safe, personal communication between DIDs utilizing end-to-end encryption and cryptographic authentication.
- SSI (Self-Sovereign Identification) Protocols: Numerous protocols and frameworks, equivalent to 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 elements 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 purposes 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 answer presently deployed on ZKsync Period with digital credentials being issued by the Metropolis of Buenos Aires.
Under, we element how a decentralized id framework might be efficiently utilized to the cross-network challenges for id, handle, and key administration beforehand mentioned.
Utilizing Decentralized Identifiers (DIDs)
Downside: Managing id for a person throughout numerous Ethereum networks is advanced.
DID Answer for Identities:
- DIDs present globally distinctive identifiers which are resolvable (to their DID Doc) and cryptographically verifiable throughout any blockchain community.
- Every DID is related to a DID Doc which comprises details about the connection of a DID with a set of cryptographic keys, the capabilities these keys can carry out equivalent to verification, authentication, authorization, assertion, and encryption, in addition to service endpoints equivalent 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 might be saved on any blockchain community, guaranteeing tamper-proof and chronic id data.
DID Paperwork for Handle Administration:
Downside: Customers have totally different addresses on the Ethereum mainnet, testnets, and Layer 2 options, together with counterfactual addresses.
DID Doc answer:
- 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 equivalent to secp256k1 utilized by Ethereum stacks.
- The verificationMethod for a key additionally permits the person to specify an ID for the verification technique. That is usually the DID plus a fraction as per the DID specification. This fragment permits two essential issues. First, it permits you to 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 might be prolonged to point if the important thing belongs to a counterfactual handle 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 handle. As well as, if required for sure causes to individually establish an handle 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 sensible contract pockets might be given its personal DID and managed by the DIDs of the good contract pockets homeowners 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, notably good contract wallets, are advanced and usually are not user-friendly.
DID Doc answer:
- 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 generally is a key the person instantly controls, or if management has been delegated, by one other person controlling a DID listed as controller.
- Subsequently, this will also 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 completed accurately that may be submitted to and verified by the good contract pockets.
Privateness (Zero-Data) Facet of DIDs and DID Paperwork
- DID Paperwork might 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, specifically, 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 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 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 personal inputs can be the Merkle proof and the digital signature. The good contract would solely should 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 data 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 handle 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 homeowners was correctly verified by a verifier within the circuit itself.
Utilizing Verifiable Credentials (VCs)
Downside: The entity performing a key operation equivalent 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 in regards to the topic of the credential equivalent 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 approved 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 varieties, every VC might be readily become a zk proof given a standardized, and publicly out there zk circuit. Revealing solely the authorized id of the VC issuer as the basis of belief, equivalent to a KYC supplier.
- Such zk proofs, specifically, ZK-SNARKs might be submitted with any transaction and verified in a sensible contract equivalent 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 usually are 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 high 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.
Subsequently, by leveraging an Ethereum-based implementation of Sidetree, the Ethereum ecosystem can be certain that every person has a self-sovereign id, that’s each personal 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 mandatory 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 id (DID) ecosystem haven’t intersected a lot, although each share a deal with decentralization. The Ethereum ecosystem has primarily focused on advancing and scaling its blockchain expertise, whereas the DID ecosystem has prioritized creating 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 vary this and begin a better 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.