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Assuring identity is difficult at the best of times, let alone in a decentralized, blockchain-driven Web3 economy. With enterprises and financial service providers still legally responsible for preventing fraudulent transactions and implementing adequate consumer protections, there’s a dire need for solutions to verify user’s digital identities.
In an attempt to address these challenges, today, privacy blockchain provider Oasis Labs announced a new partnership with Equifax to co-develop a Web3 ‘know your customer’ (KYC) solution, which will provide a blockchain-driven identity management and verification solution for companies adopting this new iteration of the World Wide Web.
The solution provides enterprises with an identity verification and AML compliance onboarding process, combining document-based identity verification, liveness checks and a selfie match to ensure compliance with international AML regulations.
It’s an example of an approach to identity management that would enable organizations to ensure KYC diligence for users without compromising their privacy.
Assuring identity in a Web3 world
The announcement comes as the Web3 economy is starting to grow, with researchers anticipating the global Web3 market will reach $81.5 billion by 2030, growing at a compound annual growth rate (CAGR) of 43.7%.
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However, one of the most significant barriers to this growth, is the lack of transparency over user identities, which makes it difficult to prevent fraud.
“As the Web3 economy continues to evolve, so does the need to further expand and evolve identity management and KYC solutions to help reduce risk and instill confidence in on-chain transactions,” said Joy Wilder, U.S. information solutions chief revenue officer and SVP of global partnerships at Equifax.
Additionally, Dawn Song, founder of Oasis Labs, said, “We are working to not only build a better, more efficient decentralized identity and on-chain KYC solution, but to help accelerate the adoption of Web3 and bring more trust to the industry.”
One of the unique selling points of the service is that it provides users with control over their Personally Identifiable Information (PII) data. All PII is processed within smart contracts that are protected with Oasis’ Sapphire confidential runtime solution, so it can associate a digital wallet with an identity without compromising user privacy.
Other providers developing Web3 KYC solutions
While the Web3 market is in its infancy, Oasis isn’t the only provider that’s looking to focus on improving the security of the space by simplifying the deployment of KYC controls.
One such provider is identity infrastructure provider Parallel Markets, which recently announced the launch of the Parallel Identity Token, a KYC and AML solution designed specifically for Web3.
The Parallel Identity Token can to confirm critical aspects of a wallet owner’s identity to verify compliance with International regulations, without storing or displaying any PII. At the start of this year, Parallel Markets announced raising $7 million in series A funding.
Another competitor is chat and collaboration provider Symphony Communication Services, which most recently raised $165 million in funding in 2019, and earlier this year announced a pilot to produce a solution that users can use to create digital identities to interact with brands in Web3.
However, the partnership between Oasis and a prominent legacy financial provider like Equifax has the potential to add new credibility to the Web3 ecosystem, and this new identity verification service.