AllianceBlock TIDV Is Live: All You Need To Know About Our Trustless Identity Verification Solution

With the launch of TIDV, AllianceBlock delivers on providing an identity verification solution that is trustless and on-chain, making it easier to offer compliance and wider participation in the ecosystem

In building seamless gateways into DeFi, AllianceBlock anticipates that regulation and compliance will play a large part in the future of digital assets. Compliance solutions are necessary for DeFi to attract institutions and other traditional financial market participants. On the other hand, privacy is core to the principles in blockchain and crypto and in many corners of the community where transaction privacy is highly regarded, having to complete KYC is a potential deal-breaker.

Trustless Identity Verification, or TIDV, is AllianceBlock’s solution for achieving the optimal balance between compliance requirements and data privacy. TIDV allows users to undergo KYC and gives them the choice of when and where to grant access to their verified identity and control the permissions requested by applications. For developers, TIDV’s optional compliance enables features in their dApps that require KYC verification. All of these are done in a trustless manner and are verifiable on-chain while ensuring that personal data is encrypted at every step of the process and only stored securely in the user’s browser.

The launch of TIDV is a key step in fulfilling AllianceBlock’s mission of connecting traditional finance (TradFi) to DeFi. With TradFi’s stringent requirements on compliance and adherence to regulation, TIDV enables compliance with KYC requirements, giving institutions and other regulated participants a satisfactory assessment that they are transacting with trusted authenticated individuals and verified identities aren’t associated with illicit activities or under sanctions.

Moreover, TIDV provides blockchain developers the flexibility of varying levels of compliance in their dApps, which gives confidence to traditional institutions to participate and use their platforms. According to PWC, over 80% of hedge fund managers cite regulatory uncertainty as the main barrier to cryptocurrency adoption. Hence, compliance solutions are an overwhelming necessity to attract institutional wealth into the space.

What is TIDV?

TIDV is an integration solution that allows for trustless and on-chain sharing of encrypted authenticated data, such as the verification of a user’s identity. Verified users can prove their digital identity without compromising privacy. At the same time, integrated applications can confidently review potential participants with confidence in the veracity of the data, helping to avoid regulatory pitfalls.

Verification is performed by undergoing the KYC process, the results of which are encrypted and locally stored on the user’s browser. Users can use this encrypted and verified KYC report to comply with KYC requirements by integrating with applications and platforms while retaining full control of access permissions to their information.

Integrated applications can leverage TIDV to unlock features that require KYC verification by handling user identity in a trustless manner. When users grant access to their KYC information with an integrated app, their verified KYC report is encrypted and shared with the app, which is the only source that can decrypt the information.

Due to the trustless and on-chain design of TIDV, users only need to undergo identity verification through the KYC process once, which they can then use with multiple TIDV-integrated applications. As an integration solution, this reduces the friction for users to comply with KYC requirements, as they don’t have to do it again per application that requires this verification.

As more applications and services integrate TIDV, users can easily submit their encrypted and verified KYC reports, which lowers the barrier for them to participate in these applications. Users can feel confident that they have full control over their private information, where it resides, and with whom they share it. No third party, including AllianceBlock and GBG, maintains a record of their data.

For startups and developers, integration with TIDV allows them to build features that require KYC without integrating the KYC provision themselves, saving on costs and development time. As TIDV provides optional compliance, developers can build compliant features in their dApps, attracting participation from traditional markets and regulated institutions.

TIDV is an even more attractive proposition from the service provider side because it frees providers from data protection obligations resulting from carrying out KYC or identity checks. Providers will never hold any user data, so they don’t have to deal with the arduous requirements of regulations like the EU GDPR — which can eat up to eight percent of a business’s profits.

For this reason, many providers already outsource their identity checks to third parties, such as GBG. This demonstrates a significant advantage for firms, as they can use TIDV to create substantial cost savings by not having to request an identity check for every new user; instead, this is already verified, meaning cost savings for firms immediately.

The first off-chain identity verification service supported by TIDV is GBG, a leading global specialist in identity data intelligence and an established partner of AllianceBlock since April 2021. GBG delivers identity verification and KYC/AML services to 20,000 clients in 38 countries, including household names such as Santander, HSBC, Vodafone, Lego, Volvo, and Oxfam. As TIDV develops, we will continue to develop relationships and partner with more trusted and vetted companies in different jurisdictions, establishing a more decentralized group of verifiers and creating a more robust proof of authority.

How does TIDV work?

TIDV facilitates the KYC process initiated by the user off-chain with GBG and stores the encrypted and verified KYC report in the user’s browser. When connecting their wallets, users will be asked to generate an encryption key pair, which is used to encrypt and decrypt the verified KYC report whenever they use their data.

Users initiate the KYC verification process with GBG, which performs an identity check using the identification documents and liveness check provided by the users. GBG, through its ID3global service, also screens for politically-exposed persons (PEP), sanctions lists, and databases of users associated with illicit activities, restrictions and sanctions. GBG then transmits the information captured back to TIDV, where the user can verify and amend the initial KYC results. After a final verification is done and the information submitted is authenticated, a KYC report is generated, encrypted and sent back to the user. After verification, users can grant access to projects with their verified KYC information and see the status of their submission.

TIDV handles the users’ data in a trustless manner. The data is encrypted using the encryption key pairs generated by the users themselves and the public keys of both GBG and the requesting Seeker startup. Personal information is encrypted and decrypted within the browser itself, and any data in transit is encrypted. Encrypted and verified KYC reports are locally stored on the users’ browsers and are not stored by GBG or AllianceBlock. The users themselves are the only ones who can decrypt the encrypted reports.

TIDV’s verification is also verifiable on-chain. Users will sign with their wallets their verification and publish their interactions and the handling of their data to the blockchain. For example, when users connect to TIDV, they must sign their authenticated connection to TIDV. In addition, when initiating the KYC process and sending their amended data to GBG, users must sign these transactions separately. More importantly, when granting access to their KYC reports to requesting applications, users must sign their consent of the transfer.

At launch, TIDV supports the Avalanche and Polygon Mainnet networks. Users will pay for the gas fees in AVAX or MATIC depending on the network selected. TIDV also utilizes ALBT to facilitate transactions for both users and TIDV-integrated applications. Users will pay the fees for KYC verification with ALBT. TIDV-integrated applications will pay ALBT for approving user submissions of verified KYC reports.

Check out this article for a comprehensive overview of how to use TIDV and undergo identity verification. Please note that support for hardware wallets is currently still in development, and we advise users to stay tuned for an update on this.

Zero-Knowledge Proofs Boost Identity Verification

The introduction of zero-knowledge proofs (ZKPs) into TIDV will make identity verification features in the platform even more powerful. ZKPs will help ensure that identity verification is only carried out with the specific requirements needed by the requesting app for the user to interact with it. ZKPs work by allowing proof of a fact without disclosing the fact itself.

ZKPs will be integrated into TIDV using the Nexera Protocol and MetaNFT. When implemented, after verification, users can generate ZKPs of pertinent information with the data obtained from the encrypted and verified KYC report from GBG and the signature attesting to the validity of the data. Users can download the ZKP for usage off-chain or publish it to the MetaNFT as a property.

By integrating the Nexera Protocol’s MetaNFT into TIDV, TIDV-integrated applications can check the user’s MetaNFT for the ZKP property associated with their requirement and automatically approve or deny access to the user. The verification is stored only on the user’s browser (or on their computer if they downloaded it) and in their MetaNFT as a property.

This design allows TIDV-integrated applications to request specific requirements, such as age, citizenship, residence, and KYC verification, without users having to present their personal information, only verified proof. Typical checks require that users be verified as legitimate parties to transact to ensure that users aren’t involved with money laundering or under government sanctions. Therefore, TIDV will simply verify to the application that the user is legitimate without providing a copy of their identity. This identity won’t be held by a third party but will remain securely stored and encrypted in the user’s browser and their MetaNFTs.

Users are fully in control over who they grant access to their personal information. Each time they want to use a new service, they don’t have to hand over their identity again to an unknown third party and wait hours or even days to get verified. Using TIDV-integrated apps, users can get verified and participate within a few minutes. By minimizing the number of providers holding onto their identification data, users reduce the risk of their personal information falling into the wrong hands.

First Integrations with Fundrs and dua

Fundrs is the first platform to take advantage of the on-chain and trustless identity verification offered by TIDV. For Seeker startups on Fundrs, launching a compliant fundraising campaign is a straightforward process. DUA Token, recently listed on Fundrs, is the first startup to take advantage of this integration, allowing them to launch their first fundraising rounds on the platform while ensuring that capital providers are KYC-verified and are not part of any PEP, sanctions, or illicit activity lists.

From a Seeker startup on Fundrs’ perspective — in this case, dua — these are the steps they need to take to enable KYC verification for their fundraising rounds:

1. Setup Seeker application and list on Fundrs;
2. With their Seeker wallet, go through the process of verification and publishing on TIDV;
3. Set up additional wallets in TIDV that will be able to manage KYC report submissions; and
4. Review KYC report submissions from potential Funders in TIDV, paying for transactions in ALBT.

From a Funders’ perspective, wanting to buy tickets for the dua listing, the steps will be:

1. Review Seeker startup listing (by DUA Token) on Fundrs;
2. Undergo the KYC process with GBG on TIDV, paying for the fee in ALBT. Note that this could be done in advance or when purchasing the fundraising ticket on Fundrs;
3. Once the identity check is complete through TIDV, they can share their KYC verification with the Seeker; and
4. With no flags or requests for revalidation, get approval from the Seeker startup to participate in the fundraising round.

With a future release of the TIDV SDK, developers can further integrate TIDV into their applications and solutions, powering the framework for trustless and on-chain identity verification seamlessly. Furthermore, TIDV will be integral to developing the dua ID — which the DUA Token powers.

Wrapping it up

Launching TIDV is an important milestone for AllianceBlock. For our solutions and services, integration with TIDV allows us to offer features powered by optional compliance, enabling the startups and projects that use our services to set up compliant offerings — such as compliant campaigns on the DeFi Terminal, compliant fundraising rounds on Fundrs, and compliant pools on the DEX.

More importantly, this is also the beginning of a network of projects and services leveraging a more secure, private, and efficient way to verify users and use these data compliantly.

AllianceBlock is proud to lead the way in helping the industry become more self-regulated while ensuring users remain in control of their data. TIDV is an exciting addition to AllianceBlock’s suite of solutions. This launch is an important step toward building a fully end-to-end infrastructure for blockchain and DeFi.

Check out this article for a comprehensive tutorial on using TIDV and undergoing KYC. Please note that support for hardware wallets is currently still in development. Stay tuned to our channels for updates.

About AllianceBlock

AllianceBlock is building seamless gateways between TradFi and DeFi. We develop an end-to-end infrastructure leveraging decentralized technology to empower individuals, startups and businesses to build decentralized, secure and compliant solutions that accelerates their vision.

We aim to be the industry standard for DeFi development and TradFi adoption through our interoperable and composable suite of solutions and compliant products.

Be sure to follow us on Twitter, join us on Telegram, and subscribe to our newsletter, so you don’t miss out on any important AllianceBlock news or updates.

You can also find us on:

Telegram · Twitter · Instagram · Discord · Website · LinkedIn · YouTube · Reddit