Identity and ERC 725, What is ERC 735?
What is Identity? What is ERC 725, ERC 735? Learn about roles, applications and investment opportunities with ERC 725, ERC 735 in Identity.
This is a screenshot I took from Balaji Srinivasan’s (Coinbase CTO) presentation in Q3/2020.
From Cryptocurrency ERC 20 token standard used for most tokens today ⇒ NFT with ERC 721 standard, all have an irreplaceable role in the development of Crypto.
And opens a series of gates for many different fields, from DeFi, Play to Earn, Metaverse,… According to Balaji, Crypto’s next step will be identity with ERC 725, ERC 735 standards.
- So what is ERC, ERC 725, ERC 735? What problems do they help solve?
- What are the pioneering projects in the field of ERC 725, ERC 735?
- As an investor, what opportunities will we have with Identity and ERC 725, ERC 735?
All will be answered by idolmeta.net in the article below!
What is ERC?
First, let’s talk about the concept of ERC.
ERC (Ethereum Request for Comments) is the standard for development on Ethereum, from tokens, formats, and more.
When tokens share a common standard, it allows applications and smart contracts to interact with them in a more predictable way.
Anyone can create their own ERC standards, but creating is one thing, explaining the idea, developing and expanding the community to use the standard is another.
In fact, there have been many ERC standards born such as ERC 20, ERC 223, ERC 721, ERC 809, … but only a few standards like ERC 20, ERC 721 have been widely applied until now.
Recommended in 2017 by Fabian Vogelsteller, creator of the ERC 20 standard, as well as Mist browser and web3.js.
Fabian wanted to design a standard that could be used for the development of an identity management system, and that’s why ERC 725, ERC 735 were born.
What is ERC 725 & ERC 735?
ERC 725 is a standard for issuing and managing identity through smart contracts, these identity smart contracts can be used to represent people, groups, things,…
ERC 735 is the standard accompanying ERC 725 that adds or subtracts qualifications (defined properties) to these smart contracts.
Below I will take an example so that you can understand why identity is important and the problem that ERC 725, ERC 735 will solve.
Role of Identity and ERC 725, ERC 735
The important role of Identity
Identity can be understood as a set of attributes (claims) of an individual, group or thing. Claim here can be face, biography, background, and related characteristics.
To determine a person’s identity, the government and legal authorities have issued related documents, a typical example here is a citizen’s identity.
Citizen ID is proof that you have visited the offices of the competent authorities, providing the necessary documents to help identify yourself.
In return, that agency will issue a citizen ID to help prove you are the owner of that identity.
Surely you already know the important role of citizen identity in particular and identity in general.
Everything we do, from getting a driver’s license to buying a house, to registering an account online, most requires an identity verification step.
The reason I say identity includes multiple claims is because they can be changed. The number and accuracy of claims will vary from job to job.
- To create a Facebook account, we only need a gmail and phone number (personal photo, information, biography can be completely customized by the account holder).
- As for the driver’s license test, we will need citizen identification and identification documents, these information are issued by the competent authorities and are difficult to change.
Continue to take the example of citizenship. Citizen ID represents the following claims:
- Birth certificate.
- Personal photos, biometric features such as fingerprints.
- Permanent residence.
Claims can be used to create other claims, for example:
- Citizen ID can be used to apply for a driver’s license test.
- With a driver’s license, we can register as a driver for a company and be on the list of employees of that company.
- These claims can be completely taken away, for example, the police confiscate the driver’s license but the citizen’s identity is still there.
Role of ERC 725 & ERC 735
ERC 725 and ERC 735 reproduce and develop the process in the above example, the standard helps to issue identities and add and remove claims on the blockchain.
Current status of security issues
An important problem that ERC 725 and ERC 735 want to solve is that current users do not actually own their own information.
When they put up their identities, that information is not well protected.
A series of incidents related to the leakage of user information were discovered, from basic information such as name, year of birth, .. to important information such as bank account number, and scary. rather than a password…
Blockchain provides a perfect infrastructure to solve this problem and help with identity management.
However, at the moment ERC 725 and ERC 735 are a very new concept, the number of projects developing in this field is not much, and it will probably be a long time before we can see them being used. much by Crypto users, even unused.
However, Ethereum from a pioneering project on smart contract platform and can develop into a huge ecosystem as it is now, Chainlink worked in Oracle segment when the concept of DeFi was still almost unfamiliar.
The most groundbreaking Crypto projects all started with such “crazy” ideas.
And maybe we are on the verge of finding a project that will create a new era in Crypto.
Even if we are wrong, I think expanding our knowledge is an interesting part of the process of sticking to this risky but also full of potential market.
Potential and application of ERC 725, ERC 735
Below are some potentials and applications that ERC 725, ERC 735 can bring in the future.
An account represents a user, group, object,…
ERC 725 has the same effect as we create accounts over the network, instead of having to save our private key, seedphrase, we can use these accounts to interact on-chain, this helps:
1. Create an easy user experience
Users will not have to record seedpharse every time they create a wallet for on-chain interaction.
Similar to the wallets used by brothers to do testnets, airdrops or interact with other protocols, creating these accounts will help users have a much simpler experience than constantly having to backup seedpharse.
Do you think that on-boarding users, forcing them to create and save keys will give a better experience, or creating an account like signing up for a Facebook or Gmail account that is already so familiar will give a good experience than?
Surely many of you think that creating such an account will cause a great risk to the account, because almost everything in Crypto is related to tokens, and seedpharse is what helps us manage and protect the number of tokens there.
However, this is not too much of a concern, as the purpose of ERC 725 is to provide us with an easier approach to crypto.
Once the user is experienced and the account is valuable, we can completely replace the key with another more secure and backed up key.
3. Account is valid
ERC 725 helps create accounts and ERC 735 helps add claims. This means:
- We can add multiple wallet addresses with different purposes and security levels in one account: Similar to how you create multiple addresses in one wallet (main wallet, testnet 1, testnet 2,…) to Crypto experience at the present time.
- Can add personal information: Our accounts with photos, biographies can carry on-chain interactions, not as dry as the current wallet address.
- It is possible to add claims authenticated by other parties: Similar to adding a LinkedIn bio.
- Applying the reputation system: Restaurants will be rated and can add these claims to increase their reputation,…
- And there is much more potential waiting to be discovered.
ERC 725 has two small standards, ERC 725X and ERC 725Y, going into depth is quite techy, but I can summarize the following:
When we plug the ERC 725Y into commonly used standards like ERC 721, we can create a new version of NFT that’s far more complex and interesting than the current one.
Because claims can be added or removed, NFTs can attach many values to themselves such as: brand, reputation systems, creator reputation,…
And since everything is standard, other smart contracts can more easily interoperate with this NFT, which is necessary if we want to move towards the era of Interoperable NFT, where NFTs can be used in multiple Metaverses.
Identity x DeFi
Most of DeFi’s current loans are Over-collateralized, platforms like Aave, Cream support subprime mortgages but all require KYC.
Having an account with confirmed claims allows us to borrow without collateral, thereby leveraging DeFi and providing a more seamless user experience.
Real life apps
Just as DeFi is gradually being adopted by more and more people and moving towards the mainstream, the widespread adoption of on-chain identity is also the furthest goal that ERC 725 and ERC 735 are aiming for.
From small applications, for example, if you want to have the right to enter an apartment building, you need a card, or call an acquaintance in the building to take the card down, then with ERC 735, that acquaintance can add claim so we can enter the building.
The above application is a great example because it helps:
- 1) The people in the building don’t have to give the card, and they can grant the right to enter the apartment building even if they are away on business trips.
- (2) If something goes wrong, we can completely query everything on the blockchain and handle the liability with the claimant.
And maybe at some point in the future, citizen IDs, medical records, birth certificates, land use rights, etc. will all be stored on-chain and ERC 725, ERC 735 will be the key to this?
Typical ERC 725, ERC 735 projects
Currently, they have an ecosystem of projects that are developing or using the ERC 725 standard for their products.
Source – erc725alliance.org
The founder of Lusko is Fabian, the creator of the ERC 20 standard, as well as the Mist browser and web3.js.
Lusko is a blockchain for life and services, Lukso’s goal is blockchain application beyond just DeFi.
The project uses PoS consensus mechanism and is compatible with EVM.
The infrastructure and tools that Lusko brings include:
- Universal Public Profiles: Creates an electronic profile that helps users interact with the digital world.
- Digital Certificates: Issue electronic identities.
- Cultural Currencies: Applying tokens to blockchain operations.
Currently, the project has not launched on mainnet but is expected to be completed in 2021.
Zerion is a dashboard that helps users to manipulate many DeFi tasks on one platform, similar projects can be mentioned as Debank or Zapper.
At the moment, the project has not announced details on how it will apply the ERC 725 standard, but the project is available on the ERC 725 alliance website and is a project that should be of interest. .
Origin Protocol (OGN)
Origin Protocol is a pioneer project in applying ERC 725 standard, Origin’s e-commerce Dapp in 2018 was able to allow users to create and manage identities on a simple interface, and at the same time That identity is also connected to the Ethereum wallet.
With that account users can rate and score the products they buy on Origin’s marketplace.
However, a good product but not having the right time is a fatal point of Origin. The project later had to change and work on the NFT and DeFI segments.
However the code remains and with prior experience, can Origin come back strong?
Projections for ERC 725 & ERC 735
ERC 725 and ERC 735 are a very new concept, the theoretical applications are great but it will take time to see if they work or not.
In terms of investment, there are currently not too many opportunities for us to invest in this Identity array, apart from the concept, there is currently no actual data proving whether Identity is successful and has real users.
However, if Identity really develops, I think the right development direction will be as follows:
- There is a specialized infrastructure (blockchain): Similar to Ronin is a chain designed for gaming, current chains are mainly used for DeFi, or Secret Network for private transactions. Identity will have its own chain (compatible with EVM) to match its development direction
- On-board new audience: DeFi users are many and growing, but that piece of cake is currently too much for competition. Identity should start from a new user file, the fact that users can easily create an on-chain account instead of using a key will help speed up this process.
- Develop the right Dapps: Due to the new user file, dapps will also have to adapt to the aforementioned audience. For example, with the NFT 2.0 feature, owning electronic items may become mainstream and will require dapps to create marketplaces suitable for the above items.
Hopefully, the above article has provided you with sufficient information about Identity and ERC 725 and ERC 735 standards. Although this is a very new field, it cannot be denied the potential it can bring.
Crazy ideas have given us blockchain, desires for change have given us DeFi, Play to earn, NFT,… And what ideas will open the next gates for us?
If you have other questions related to the above topic, please comment below so that idolmeta.net can help you right away!