12 September 2024
Ethereum Open Neighborhood Tasks L2 Requirements Working Group
Vitalik Buterin recognized three essential transitions for Ethereum: scaling by L2 rollups to scale back prices, enhancing pockets safety by way of good contract wallets for higher safety and consumer expertise, and advancing privateness by privacy-preserving mechanisms. This text explores how integrating W3C Decentralized Identifiers (DIDs) and Verifiable Credentials (VCs) can deal with a few of these challenges by bettering the administration of identities, keys, and addresses, leveraging present decentralized identification options to assist Ethereum’s transitions effectively to maneuver to a extra L2-based world.
As Vitalik Buterin identified in a collection of 2023 articles, significantly his Three Transitions article, Ethereum is transitioning from a younger experimental expertise right into a mature tech stack that would carry an open, world, and permissionless expertise to common customers. Nevertheless, he believes that there are three main technical transitions that the stack must endure, roughly concurrently:
- L2 Scaling Transition: This includes shifting the ecosystem to rollups to deal with the excessive transaction prices on Ethereum, which have reached $3.75 and even $82.48 throughout a bull run
- Pockets Safety Transition: The shift to good contract wallets (account abstraction) is important for enhanced consumer consolation and safety in storing funds and non-financial belongings, shifting away from centralized exchanges and single non-custodial wallets.
- Privateness Transition: Guaranteeing privacy-preserving funds transfers and creating different privacy-preserving mechanisms akin to social restoration and identification techniques is crucial to stop customers from resorting to centralized options that provide just some or nearly no privateness.
Vitalik emphasizes that these transitions are essential and difficult because of the intense coordination required to implement them. Particularly, he mentioned the implications of those transitions on the connection between customers and addresses, fee techniques, and key administration processes. The connection between customers and their addresses, and key rotation/restoration are a significant concern each technically and from a usability viewpoint – UX determines success or failure regardless of how good the underlying expertise is.
On this article, we are going to delve into these latter points and focus on how options from one other ecosystem, specifically the one targeted on decentralized identification, additionally sometimes called self-sovereign identification, can considerably help with the transitions with out having to reinvent too many wheels.
The issue assertion within the context of Ethereum’s technical transitions could be summarized as follows in line with Vitalik:
- Advanced Funds: The transitions make easy actions like paying somebody extra complicated, requiring extra data than simply an deal with as a result of the consumer wants to find out which funds to make use of, the place to ship it to, and particular fee directions typically involving identification data.
- Sensible Contract Wallets: Sensible Contract wallets add technical points that should be addressed, akin to guaranteeing wallets monitor ETH despatched by good contract code together with monitoring throughout networks.
- Privateness Challenges: Privateness-preserving transactions, if carried out, introduce new challenges, akin to needing a “spending public key” and encrypted data for the recipient to search out the fee and how one can decide it up.
- Identification Adjustments: The idea of an “deal with” will change, doubtlessly requiring a mix of a number of addresses, encryption keys, and different information to work together with a consumer.
These factors, subsequently, elevate the query of how we handle identification, addresses, and their keys collectively, and in a approach that doesn’t confuse the consumer, and compromise the safety of their belongings.
Given the above drawback assertion, the idea of an “deal with” within the Ethereum ecosystem, is evolving, with the standard concept of an deal with as a single cryptographic identifier changing into out of date. As a substitute, “directions for how one can work together with me” will contain a mix of addresses on a number of Layer 2 (L2) platforms, stealth meta-addresses, encryption keys, and different information. In his article, Vitalik factors out that one attainable strategy could be utilizing the Ethereum Identify Service (ENS) information to comprise all identification data. Sending somebody an ENS title like “alice.eth” would permit them to entry all the mandatory particulars for interplay, together with fee and privacy-preserving strategies. Nevertheless, this technique has drawbacks, akin to tying an excessive amount of to 1’s title and the lack to have trustless counterfactual names, that are important for sending tokens to new customers and not using a prior blockchain interplay. As well as, the ENS system is a rent-seeking system. Due to this fact, extra broadly, it isn’t equitable and doesn’t assure continued possession of 1’s identification; that’s not a tenable state of affairs. An alternate answer includes keystore contracts that maintain all identification data. These contracts could be counterfactual-friendly and aren’t tied to a selected title, permitting for extra flexibility and privateness.
This brings us to the subject of keys controlling “addresses”. Particularly, key rotation and key restoration in a multi-address Ethereum Ecosystem. Key rotation is simply changing into an necessary function with good contract wallets and account abstraction the place the controlling deal with of a sensible contract pockets would possibly change as a result of a key’s rotated or recovered which necessitates a brand new controlling deal with. Regardless of key rotation or key restoration, the standard technique could be to run onchain-procedures on every deal with individually. That is impractical as a result of fuel prices, counterfactual addresses, and privateness issues. As talked about earlier than, Vitalik proposes the utilization of keystore contracts that exist in a single location and level to verification logic at totally different addresses. This may permit the creation of a proof of the present spending key for transactions. This requires a restoration structure that separates verification logic and asset holdings, simplifying the restoration course of by requiring solely a cross-network proof for restoration.
On this context, Decentralized Identifiers can leverage keystore contracts to empower a modular verification logic for contract accounts that verifies zk proofs by a selected validation module and embeds a system to standardize onchain executions.
Including privateness measures, akin to encrypted pointers and zk proofs, will increase complexity. Nevertheless, it provides potential synergies with keystore contracts for persistent addresses for the reason that persistent deal with might be “cloaked” in a zk proof.
What does this all imply for good contract wallets? Historically, wallets had been designed to safe belongings by defending the personal key related to on-chain belongings. If the important thing was to be modified, the previous one might be safely disclosed with none threat. Nevertheless, in a zero-knowledge world wallets want to guard information apart from belongings. The instance of Zupass, a ZK-SNARK-based identification system, illustrates that customers can maintain information regionally and solely reveal it when essential. Nevertheless, dropping the information’s encryption key means dropping entry to all encrypted information. Due to this fact, the administration of encryption keys can be changing into more and more necessary. Vitalik means that a number of units or secret sharing amongst (key) “guardians” might be used to mitigate the danger of dropping encryption keys. Nevertheless, this strategy isn’t appropriate for asset restoration because of the potential threat of collusion amongst “guardians”. Lastly, the idea of an deal with as a consumer’s on-chain identifier should change, and, subsequently, wallets should handle each asset restoration and encryption key restoration to keep away from overwhelming customers with complicated restoration processes aka poor UX. For instance, Signal In With Ethereum depends on the onchain deal with and the consumer’s personal key controlling that key to generate the authentication message. Nevertheless, there isn’t a notion of a one-to-many relationship on this strategy, and no notion of a sensible contract pockets as the first delegate of the consumer. The verifying celebration, additionally referred to as the relying celebration, subsequently, can not assess the scope of the authorization(s) required for the consumer when logging during which is essential relying on the performance the verifying celebration makes out there to the consumer deal with.
The Three Transitions are extra than simply technical enhancements; they characterize radical shifts in how customers interact with Ethereum-based stacks, particularly within the areas of identification, key administration, and addresses, thereby, evolving the Ethereum ecosystem from its present state right into a extra user-friendly and accessible platform that prioritizes scalability, safety, and usefulness. Due to this fact, one would naturally ask the next query: Are there instruments and frameworks already out there that might be utilized by the group, particularly concerning identification, key administration, and privateness to ease the transitions? The reply to that may be a particular sure. Particularly, the ecosystem that has developed across the idea of decentralized identification and its requirements, frameworks, and quite a few reference implementations has produced tooling that’s readily usable throughout the Ethereum stack.
What’s the Decentralized Identification Ecosystem?
The decentralized identification ecosystem is targeted on giving people management over their digital identities with out counting on centralized authorities. It leverages blockchain expertise and cryptographic rules to make sure privateness, safety, and user-centric identification administration. On the core of this ecosystem are two key ideas: Decentralized Identifiers (DIDs) and Verifiable Credentials (VCs).
Decentralized Identifiers (DIDs):
DIDs are a brand new sort of identifier that allows verifiable, self-sovereign digital identities. They’re distinctive, globally resolvable identifiers related to a topic, akin to a person, group, or system. DIDs are decentralized by design, that means they don’t depend on a central registry or authority for his or her creation or administration. As a substitute, they’re created and managed by the customers or entities appearing on their behalf. DIDs sometimes make the most of public-key cryptography to make sure safe interactions and…
