DeFi ecosystem startup AllianceBlock says it has come up with a solution to the problem of blockchain-based identity verification, giving users the option of undergoing KYC just once and then using their established identity across multiple services and products.
The new solution is AllianceBlock’s Trustless Identity Verification (TIDV) application, which makes it possible for anyone to prove they are who they say they are, without revealing any details of themselves to the service they’re signing up for. This is possible because users must first undergo KYC with a third-party verification service, which then stores their anonymized identity credentials on-chain. Then, service providers can review applications and verify them without needing to see their identity data.
It’s a solution that solves some big problems. DeFi regulation is surely just a matter of time, and it means that retail investors need a compliant solution. But at the same time, users don’t want to sacrifice their privacy with decentralized services. With AllianceBlock’s TIDV, DeFi users have a way to prove their identities while ensuring that their private information remains secure. No service provider, including AllianceBlock or its verification partner GBG, will maintain a record of user’s personal data.
The biggest advantage of TIDV is it means users only need to go through the KYC process once. By doing so, they create a verifiable and encrypted identity that can be used across multiple DeFi applications and services. The key thing to understand is that once the KYC process has been completed, TIDV encrypts those records to ensure they can only be accessed by the services that need to. In this way, users retain full control over their data and its access permissions, and have the ability to revoke access at any time.
GBG’s managing director Boris Huard explained that his company’s KYC service is quick to deploy and able to verify user’s identities in seconds, creating a secure environment that meets compliance needs without sacrificing the user experience. “We are excited to partner with AllianceBlock to provide KYC checks for TIDV to protect against the ever-more sophisticated methods of crypto-crime and work together to build trust in the digital assets industry,” he added.
AllianceBlock said TIDV is initially being integrated with its own Fundrs service, which is a crowdfunding platform that enables anyone to invest in up and coming crypto projects. This ensures that startups seeking to raise capital through Fundrs can comply with regulatory requirements. The first project to take advantage of the service will be dua Token, which is building a Web3 platform that seeks to bring together globally-fractured communities.
Later, AllianceBlock said TIDV will be integrated with its DeFi Terminal, Data Tunnel and DEX platforms, enabling its community to participate in all of its platforms in a compliant way. In addition, AllianceBlock TIDV will be made available to third-party DeFi apps and services that are interested in bolstering their compliance.
“Trustless IDentity Verification has the ability to revolutionize the way compliance is managed in DeFi and blockchain,” said AllianceBlock CEO Rachid Ajaja. “It will give users complete control over their online identities and let them connect to different integrated dApps and revoke permissions if needed.”
