Unique solutions for compliant privacy in web3 were discussed and offered during Cointelegraph’s recent AMA session that brought together Occam DAO core contributor Cristina Stavila, Galactica Network co-founder Michael A. and SwissBorg founder and CEO Cyrus Fazel.
As the speakers discussed, the establishment of solid standards for compliant privacy is required as a key component for mass crypto adoption. "Compliant privacy is the only technological component between a nightmarish dystopia of CDBC and a high-profile Web3 world of obfuscated identities," Michael noted. "The regulations and the establishment of certain KYC entry points on the blockchain are necessary for the elimination of malicious participants. This process must respect privacy, which requires off-chain KYC processes that are still verifiable on-chain."
The hope lies in the zero-knowledge technology that Galactica Network uses for KYC-based transactions. As an L1 protocol, it allows for several applications all based on zero-knowledge - zkCertificates (non-transferable NFTs that selectively disclose arbitrary data), Reputation Root Contract or RRC (smart contract that calculates reputation scores and conditions interactions for users based on them), and contingent transactions (transactions that use RRC to establish dynamic transaction acceptance or rejection rules for users interacting within dApps).
“We don’t offer ready-made cases but rather platform standards and infrastructure for builders’ communities to invent infinite use cases with our stack. However, we envision our stack being applied to a range of situations, such as proof of personhood, which enables truly decentralized social networks. Or on-chain reputation, where, for example, a person who actively participates in the network and maintains a good reputation can benefit from better credit terms."
With reputation systems laying the groundwork for the establishment of meritocratic governance structures, Galactica Network has a much more ambitious vision for its so-called Protocol Citizenship, which resembles regular national citizenship with a set of rules, rights, and responsibilities, but operates within a Sybil-resistant network.
This novel concept, which Galactica Network calls the Cypher State, allows for the creation of on-chain political institutions and offers citizens access to various rights such as universal basic income, real-world assets, and political processes. "We modeled the Cypher State after modern Swiss political concepts, where we also recreated some important institutions like the Academy of Sciences or the Parliament," Michael added. He also pointed out potential downsides of Galactica Network’s solutions, such as the risk of adverse reputations and fragmentation of liquidity.
The speakers agreed that zero-knowledge proofs are a bridge that encourages collaboration and partnership, and promotes a balance between Web3, decentralization maximalists, and traditional institutions. "This approach represents uncharted territory in the blockchain space, but we believe it can play a critical role in promoting mass crypto adoption," they concluded.
Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you with all important information that we could obtain in this sponsored article, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor can this article be considered as investment advice.