According to Fabrice Cheng, CEO and co-founder of Quadrata, decentralized identity (DID) and compliance services will become a “key infrastructure” to the achievement of decentralized finance (DeFi) and the future of real-world financial assets onto the blockchain.
The primary source of demand for DID, according to Cheng, will be Web3 protocols, which would employ user DID to create better products that “pander” to current customers and “target new sets of customers”.
With the use of its Web3 Passport Network, which it recently integrated through a partnership with Ethereum Layer-2 scaling solution Polygon, Quadrata gives clients a way to achieve KYC compliance without disclosing personal information.
Cheng stated that Web3 users will have to provide some basic Know Your Customer (KYC) information as part of the onboarding process, but once they do, they won’t have to do it again because it will be widely accepted on-chain.
In order to acquire a competitive edge, Cheng also stated that Web3 companies, similar to traditional businesses, will need to evaluate their customers. Cheng gives an example of Amazon in which the item’s reviews, reputation, and ratings are prioritized, and their approach will be no different on the Web3 platform.
More “real world assets” and institutional finance will go on-chain if they are accompanied by an “identity or reputations solution”, according to Cheng, who claimed that DeFi was the significant possible use case for DID.
DID will send a strong indication that blockchain is a revolutionary technology for financial institutions, Cheng continued, once it gains widespread acceptance.
When questioned why it would be advantageous for Web3 users to provide KYC information, Cheng responded that although it is not yet required, some users might be denied access to protocols that do.
One major benefit of DID over conventional identity solutions, according to Cheng, is that KYC only needs to be completed once.
Cheng remarked that Quadrata and its counterparts will have to make a difficult moral choice over where to draw the boundary between giving Web3 companies access to crucial identity data and maintaining user privacy.
Cheng emphasized that Web3 wallet technology needs to advance to a stage where both commercial and institutional users can handle a wallet and feel secure getting custody over their assets before a DID solution is fully implemented.
On July 26, Quadrata announced the launch of its mainnet on the Ethereum network. Users of the Quadrata Passport can verify their “humanity” and KYC/AML compliance in order to increase the number of services that can be accessed on-chain.
