PolygonDAO

Posted on Sep 15, 2022Read on Mirror.xyz

Polygon ID, the next step in Privacy and Identity for DAOs

More and more, our actions require verification of our identities: taking an under-collateralized loan, withdrawing and depositing between your bank and a CEX, or signing up for a new service. Yet, the current systems for verifying users and establishing trust on blockchains are inconvenient for users and onerous for protocols. More importantly, the current approach forces users to surrender their privacy.

A new era for privacy, identity, and verification on the internet.

Polygon ID introduces a self-sovereign private identity solution that changes the means of verifying user identities required within DAOs and other web2 & web3 services. Traditionally, in DAOs, community members vote on protocol decisions using tokens and signatures from their personal wallets. Because such data exists on a blockchain, other users can trace previous transnational activity from voter wallets – thus reducing privacy.

Polygon ID solves this issue by verifying private information on-chain using zkProof Request Language, a unique protocol for apps to specify the requested private attributes that the user needs to prove. This way, Identity reputation can be cryptographically verified in a privacy-preserving way directly on-chain to trigger trustless executions/actions.

Through the Polygon ID app, users go through a KYC process to verify their identity. After verifying their identity, they receive so-called claims that allow users to verify their identity privately on-chain.

The Underlying Architecture

Polygon ID achieves privacy by default by using iden3, which is a decentralized identity management solution for blockchains. Iden3 uses Circom 2.0, a powerful language to build ZK-Circuits. Iden3 utilizes ZK-Snarks, which is a battle-tested cryptographic proof, and the most efficient for proof verifications on-chain.

These zero-knowledge proofs come with the benefit of:

  • Allowing you to verify information without sharing all information

  • Privately verifying user rights right from a Smart Contract

  • zkSNARKs being the smaller proof size for optimal on-chain verification

  • zkProof composability, which enables reputation models for people-powered networks

Where can Polygon ID be used?

Polygon ID can be used anywhere where a unique identity has to be securely verified with strong privacy. There are many such areas in both web2 & web3.

  • DAOs

  • DeFi

  • Metaverse

  • Businesses

  • Social Media

  • Fintech

  • KYC

Stronger privacy guarantees mean more possible use cases, which in turn results in more users onboarded. As mentioned above, Polygon ID isn’t just limited to web3. Polygon ID is just as useful and powerful for web2 businesses and platforms.

A prime example of this could be a business that is giving away freebies but wants to make sure that every claimant is unique and over the age of 21. They can utilize Polygon ID to allow their audience to create claims and privately verify their identity.

A New Era for Privacy, Identity, and Verification Within DAOs

Identity in the digital world.

In the digital world, a person can have several identities depending on who they are interacting with. Pinning that digital person to a physical human is sometimes impossible, especially in decentralized systems. While this anonymous approach has its benefits, it also leads to certain challenges when it comes to governance, specifically in DAOs.

An example of this could be a person posing as thousands of different people and voting for a proposal that they want to sway in a particular direction. There is also the challenge of accountability, as there is no real person mapped to a digital identifier who is to be held accountable in case something happens.

Privacy, identity, verification within DAOs.

A decentralized autonomous organization (DAO) is an entity with no central leadership. Decisions get made from the bottom-up, governed by a community organized around a specific set of rules. The transaction history and programmed rules of a DAO are stored on a blockchain, which boosts the transparency and immutability of a DAO.

There is a strong relationship between DAOs and verifiable credentials because a well-run DAO should function as a transparent platform that allows users to retain control over their personal data and identities.

Privacy, Identity, and verification within DAOs in today’s world.

Most DAOs in today's world require you to own governance tokens representing ownership in a decentralized protocol. They provide token holders with certain rights that influence a protocol’s direction. This could include which new products or features to develop, how to spend a budget, which integrations or partnerships should be pursued, and more.

Generally speaking, exercising this influence can take two forms. First, governance token holders can propose changes through a formal proposal submission process. If certain criteria are met, and the proposal goes to a vote, governance token holders can use their tokens to vote on the proposed changes. The specific mechanisms and processes through which these rights are exercised differ across protocols.

Having governance controlled by tokens means all investors in a DAO have the opportunity to shape the decisions on running the future of the organization. The number of DAO tokens of an investor would determine their voting power in the organization.

All these DAO tokens and governance votes are publicly visible on the blockchain. Anyone can look up which address voted for what solution, thus reducing privacy. While DAOs are intended to offer seamless accessibility, a specific group of investors can accumulate major shares of DAO tokens. As a result, they would gain higher voting power on the basis of the number of governance tokens they have.

This brings the possibility for people with the highest share of governance tokens to vote for unreasonable proposals or act maliciously. Therefore, the disadvantages of DAOs in today’s world start with problems due to hierarchy in the DAO’s governance structure.

Privacy, Identity, and Verification Within DAOs in Tomorrow’s World

Polygon ID is here to change the means of DAO governance. Polygon ID allows only those that have received valid attestations to participate in voting. Once verified, activity is completely private.

Polygon ID also creates the possibility for fully-private & verifiable reputation building. Anyone adding value to a DAO can be rewarded with claims for their work. Those claims can then serve as a basis for financial incentive and decision-making powers within the DAO.

Utilizing Polygon ID instead of governance tokens comes with several benefits;

  • Fully private.

  • Difficult to fake identities.

  • No Sybil attacks.

  • Voting power by reputation, not wealth.

  • Claims are more difficult to steal than governance tokens.

  • Aligned with Web3 privacy ethos

  • Targeted incentives

  • Only required information to be requested

DAOs can now issue ecosystem-wide attestations about their members in a fully private and permissionless way. Consequently, DAOs can verify attestations about their users without the need to actually collect any private information, trusting solely the ZK proof and the source of trust (the issuer). Those attestations can then be used within governance to assist in decision making or any other system like incentive distribution, e.g., targeted airdrops.

Users can also provide proof of their identity when engaging in other activities such as initial coin offerings, token airdrops, decentralized exchange (DEX) trading, or those in which strict Know Your Customer (KYC) requirements apply.

With the capacity to introduce a Sybil-resistant one-vote-per-person mechanism, the use-cases can also expand beyond the DAO sector to the metaverse, gamify, DeFi, and nonfungible token (NFT) industries whereby asset authenticity is verified via on-chain, privatized claims.

Polygon ID x Polygon DAO Integration

Polygon DAO has recently incorporated Polygon ID-based governance into its processes. To start with, Polygon DAO will leverage this tool to enable Sybil-resistant governance participation based on claims issued by the DAO to users. Polygon DAO will allow for private-by-default verification of humans, providing DAO Membership and Proof of Personhood claims for use within the Polygon ecosystem.

Read more about this here.

About Polygon DAO

Polygon DAO is the centerpiece of Polygon’s long-term strategy of progressively decentralizing the ecosystem's growth to the community. Polygon DAO aims to represent and support various areas of interest within the Polygon ecosystem. Through Polygon Village, developers gain access to everything they need to build, grow, and showcase their Web3 initiatives; projects building on Polygon receive comprehensive, quality support.

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