12 September 2024
Ethereum Open Group Initiatives L2 Requirements Working Group
Vitalik Buterin recognized three essential transitions for Ethereum: scaling via L2 rollups to scale back prices, enhancing pockets safety by way of good contract wallets for higher safety and consumer expertise, and advancing privateness via privacy-preserving mechanisms. This text explores how integrating W3C Decentralized Identifiers (DIDs) and Verifiable Credentials (VCs) can tackle a few of these challenges by enhancing the administration of identities, keys, and addresses, leveraging current decentralized identification options to help 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 know-how right into a mature tech stack that might carry an open, world, and permissionless expertise to common customers. Nevertheless, he believes that there are three main technical transitions that the stack must bear, roughly concurrently:
- L2 Scaling Transition: This includes shifting the ecosystem to rollups to handle 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 critical 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 reminiscent of social restoration and identification methods is important to forestall customers from resorting to centralized options that provide just some or just about no privateness.
Vitalik emphasizes that these transitions are essential and difficult as a result of intense coordination required to implement them. Particularly, he mentioned the implications of those transitions on the connection between customers and addresses, cost methods, and key administration processes. The connection between customers and their addresses, and key rotation/restoration are a serious concern each technically and from a usability viewpoint – UX determines success or failure regardless of how good the underlying know-how is.
On this article, we’ll delve into these latter points and focus on how options from one other ecosystem, specifically the one centered on decentralized identification, additionally sometimes called self-sovereign identification, can considerably support 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 accordance with Vitalik:
- Complicated Funds: The transitions make easy actions like paying somebody extra complicated, requiring extra data than simply an tackle as a result of the consumer wants to find out which funds to make use of, the place to ship it to, and particular cost directions typically involving identification data.
- Good Contract Wallets: Good Contract wallets add technical points that should be addressed, reminiscent of making certain wallets monitor ETH despatched by good contract code together with monitoring throughout networks.
- Privateness Challenges: Privateness-preserving transactions, if applied, introduce new challenges, reminiscent of needing a “spending public key” and encrypted data for the recipient to search out the cost and how you can decide it up.
- Identification Modifications: The idea of an “tackle” will change, probably requiring a mix of a number of addresses, encryption keys, and different knowledge 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 method that doesn’t confuse the consumer, and compromise the safety of their belongings.
Given the above downside assertion, the idea of an “tackle” within the Ethereum ecosystem, is evolving, with the standard concept of an tackle as a single cryptographic identifier turning into out of date. As an alternative, “directions for how you 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 knowledge. In his article, Vitalik factors out that one attainable method can be utilizing the Ethereum Identify Service (ENS) data to comprise all identification data. Sending somebody an ENS title like “alice.eth” would enable them to entry all the required particulars for interplay, together with cost and privacy-preserving strategies. Nevertheless, this methodology has drawbacks, reminiscent of 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 with out a prior blockchain interplay. As well as, the ENS system is a rent-seeking system. Due to this fact, extra broadly, it’s not 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 will not be 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 turning into an essential characteristic with good contract wallets and account abstraction the place the controlling tackle of a wise contract pockets may change as a result of a secret’s rotated or recovered which necessitates a brand new controlling tackle. Regardless of key rotation or key restoration, the standard methodology can be to run onchain-procedures on every tackle individually. That is impractical attributable to gasoline 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 completely different addresses. This could enable 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 via a selected validation module and embeds a system to standardize onchain executions.
Including privateness measures, reminiscent of encrypted pointers and zk proofs, will increase complexity. Nevertheless, it provides potential synergies with keystore contracts for persistent addresses for the reason that persistent tackle could possibly 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 non-public key related to on-chain belongings. If the important thing was to be modified, the previous one could possibly be safely disclosed with none danger. Nevertheless, in a zero-knowledge world wallets want to guard knowledge in addition to belongings. The instance of Zupass, a ZK-SNARK-based identification system, illustrates that customers can maintain knowledge regionally and solely reveal it when obligatory. Nevertheless, dropping the info’s encryption key means dropping entry to all encrypted knowledge. Due to this fact, the administration of encryption keys can also be turning into more and more essential. Vitalik means that a number of units or secret sharing amongst (key) “guardians” could possibly be used to mitigate the chance of dropping encryption keys. Nevertheless, this method will not be appropriate for asset restoration as a result of potential danger of collusion amongst “guardians”. Lastly, the idea of an tackle as a consumer’s on-chain identifier must 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 tackle and the consumer’s non-public key controlling that key to generate the authentication message. Nevertheless, there isn’t any notion of a one-to-many relationship on this method, and no notion of a wise contract pockets as the first delegate of the consumer. The verifying celebration, additionally known 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 tackle.
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 could possibly be utilized by the neighborhood, particularly relating to identification, key administration, and privateness to ease the transitions? The reply to that could be a particular sure. Particularly, the ecosystem that has advanced 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 know-how and cryptographic ideas 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 permits verifiable, self-sovereign digital identities. They’re distinctive, globally resolvable identifiers related to a topic, reminiscent of a person, group, or system. DIDs are decentralized by design, which means they don’t depend on a central registry or authority for his or her creation or administration. As an alternative, they’re created and managed by the customers or entities appearing on their behalf. DIDs usually make the most of public-key cryptography to make sure safe interactions and…
