Opinions are the author’s own and are for discussion purposes only. This does not represent the views of Decentral Park Capital or its affiliates. Furthermore, this does not constitute legal, accounting, or tax advice of any kind and should not be relied upon as such.
‘This is my wallet. There are many like it, but this one is mine. My wallet is my best friend. It is my life. I must master it as I must master my life. Without me, my wallet is useless.’ - Full Leather Jacket
Imagine we live in a world where know-your-customer (KYC) due diligence is not perceived as a burden or barrier to access. Rather, it is freely accessible, ownable, secure, dynamic and portable. It is permission-less permissioning in the most literal sense. It does not restrict access, but rather opens up the wallet holder to more options, to a more frictionless experience with financial products. In a soon to be permanently changed world of weaker national currencies, polar treaty organizations, and the new sanctioned world order, where a future world of surveillance tools (CBDCs), heightened AML regulations, regulatory parity driven by geopolitical strife and censorship, the emerges from the darkness a web 4.0 wallet with an anonymous front end and universally accepted trust mark, and a vaulted and private keyed back end containing evaporating personally identifiable information. This is prosopagnosia with the ability to recognize inherently whom to trust without knowing explicitly why, other than they are compliant with AML/BSA concerns. Herein lies the opportunity for the web 4.0 wallet.
Hi, I am a web 4.0 wallet, I am the last wallet you will ever own. I will be of you forever.
In this wallet there are cards, to start:
- Credit and debit cards are familiar and are embodied by assets held in the wallet.
- Driver’s license with a stated identity and performance record.
- Voter ID card with a dynamic voting record.
These cards are swiped and provide information and value transfer to any protocol.
Protocols are the card reader, connecting directly with a web 4.0 wallet or via a KYC oracle network.
The wallet holder commits verifying documentation to the wallet, which automatically vets against registries and lists, and provides a dynamic trustmark that travels with the wallet holder. Everywhere.
Democratization of Finance. The single most abused phrase in modern consumerism. Everything devolves into a banking apparatus. Every brand. Every marketplace. Every technology. Anything that takes wallet share. If it is frictionless to use across services, portable across networks, cost neutral, and has a product feature network effect (meaning several complementary products), it is often touted as a tool for ‘democratizing access to financial services’ of some kind or in some way. What it really is customer stickiness, but that’s for a different discussion. What if ‘democratization’ wasn't a consolidated banking technology stack or products, what if it is a global semi-permissioned wallet that plugged in to all protocols?
The web 4.0 wallet is a semi-permissioned gateway to all blockchains. A user deposits personal identifying information and documents (PII) to a self destructing vault within a wallet. These documents support an identity that is vetted against a KYC oracle (an amalgamation of sanction lists, black lists, etc.) via smart contract and creates a non-identifying trust mark and then destroys the documents. The smart contract is universally approved via treaty and generates a trust mark of the person, and posts to the web 4.0 wallet. The web 4.0 wallet is now verified and holds within it a faceless avatar in the form of a unique identity NFT. The walled garden of manual KYC and insecure and over-permissioning is now negated and you can now begin to use the wallet. The first documents to put into your web 4.0 wallet are reputation based trackers of sorts to include a voter ID card and a driver’s license. The voter ID allows the wallet holder to aggregate participation in decentralized governance and networks, effectively streamlining and making decentralization more user friendly. The driver’s license is an associated record that details the wallet holder’s reputation. This effectively measures the assets held in the wallet and associated proactivity of the walletholder based on voting participation and interaction. The wallet boasts a reputation score and bonding curve that effectively correlates asset positions with good citizenship. The web 4.0 wallet can help shape the future of decentralization, adoption, and real world use cases as the broader world meets blockchain technology and the metaverse for the first time. It can verify an avatar (wear it as clothes), or hold multiple identities and trust marks depending on the use case.
The case to NOT build, and how to monetize, all In the same breath. Why would you not build this? Because it will have the single largest total addressable market in crypto? Let's ask ourselves, are we actually doing something good? No, because you will have no recourse against a third party for relying on their services in verifying that there is no criminal activity pervading your product or protocol. Even worse, you, as the promoter, are making decisions and representations about who and what is not sanctioned and if you get this wrong, you are opening the pandora's box of liability and an argument can be made that you are furthering non-compliance and evasion. Why not then an aggregator of web 3.0 solutions? You can imagine that moving away from the walled garden of the existing KYC/AML/CFT status quo is a daunting enterprise, but maybe start where there are organic use cases exploding in size and willing to help accelerate the movement. DAO treasuries and tooling providers. Bake this into grant and bounty platforms. To start, replace ALL web 2.0 solutions and web 3.0 attempts at manual KYC compliance for a fraction of the human overhead (note, in the new AML paradigm, discretion will evaporate, thereby supporting binary smart contracts determining who is and is not on lists). At some point the calculus to build has to net positive and the new biometrics makes sense.
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