Conditional Transfer of Digital Assets via Digital Identity and Verified Credentials

[GENERAL] Name and surname of main applicant

[GENERAL] Are you delivering this project as an individual or as an entity (whether formally incorporated or not)

[GENERAL] Please specify how many months you expect your project to last (from 2-12 months)

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language

[GENERAL] Summarize your solution to the problem (200-character limit including spaces)

This is a research project where Digital Identities and Verifiable Credentials are used to allow the decoding of secrets by anyone who was granted this right, pending on some external conditions.

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

[GENERAL] If YES, please describe what the dependency is and why you believe it is essential for your project’s delivery. If NO, please write “No dependencies.”

Dependencies on Atala Prism (now just renamed HyperLedger Identus). Our project will make intensive use of their system and will rely on the availability of Identus Agent Nodes.

[GENERAL] Will your project’s output/s be fully open source?

[GENERAL] Please provide here more information on the open source status of your project outputs

MIT License

[METADATA] SDG rating

SDG goals:

Goal 9. Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation

SDG subgoals:

9.b Support domestic technology development, research and innovation in developing countries, including by ensuring a conducive policy environment for, inter alia, industrial diversification and value addition to commodities

Key Performance Indicator (KPI):

9.c.1 Proportion of population covered by a mobile network, by technology

[SOLUTION] Please describe your proposed solution

Disclaimer: It's important to clarify that this project falls under the "Concept" category and does not assure definite outcomes. While the ideas hold significant value and the problem is crucial, there is currently no apparent solution in the market. Thus, it remains a research project with uncertain results. To address this uncertainty, I have extensively researched all underlying concepts and conducted various proof-of-concepts, leading to what I believe is a feasible approach. Moreover, I have minimised the budget requirements to maximise value, considering the higher-than-normal risk involved.

Problem: My aim is to securely manage the access to all my digital assets (primarily my private keys), ensuring that they remain confidential without anyone else's awareness, and be convenient to retrieve only by myself. Yet, in the event of death or severe incapacity, I want those assets to transition securely to designated individuals without further involvement from me. How can this be achieved? Solving this challenge could revolutionise the wills and testament industry and prevent permanent loss of digital assets in the growing crypto industry at large.

Solution: The emergence of Digital Identities and Verifiable Credentials introduces a novel approach. It enables secure and private communication without necessitating intricate knowledge about the other party. Additionally, within these secure channels, Verifiable Credentials can convey factual information or grant rights to other entities. Moreover, leveraging AnonCreds allows us to obtain proof of granted rights without disclosing all associated conditions openly. This opens the way for encrypting/decrypting secrets based on proofs of identity and proof of specific rights. In such scenario, the seed phrase of a wallet could be passed encrypted onto a person of choice, and its decryption would only be permitted after some external trigger happen.

Engagement: the current and ongoing research, test scripts, and proof (what works vs what does not work) will be transparently published on the GitHub repo as they happen. The design of a feasible solution will also be delivered as part of this research project. A presentation to the Catalyst/Cardano community will be planned by end of the project, as well as video reports of the final findings.

Impact: The project will solely use Atala Prism, which is built on Cardano. Therefore, Cardano stands to gain primarily from its implementation. Subsequently, if it progresses to wider commercial adoption, either through my continued efforts (which I am committed to) or by others benefiting from this research, it could bring substantial benefits to the Cardano Community. Notably, although the project has cross-chain functionalities and would benefit the whole crypto industry, it takes fee payments in ADA (via Atala Prism).

[IMPACT] Please define the positive impact your project will have on the wider Cardano community

This research project will establish the feasibility and architecture design for a secure conditional asset transfer automated system. All milestones will be delivered open-source and be available for anyone in the community to reuse or improve. This project can deliver transformative impacts to the broader Cardano community. Success will manifest in several ways, bringing substantial value:

• Elevated Ecosystem Utility: Our solution Design and Proof of Concept could enhance Cardano's utility, making it a pioneering blockchain for managing wills and testaments for digital assets. The ability to provide users with secure conditional asset transfer introduces a novel dimension, attracting developers, users, and businesses.

• Preventing Digital Asset losses: According to SoFi, it is estimated that roughly 20% of the Bitcoin mined so far is unrecoverable, and may be in lost wallets, or in accounts or wallets that people have forgotten the passwords to. And that is just for one digital asset (BTC). With a Crypto global market cap at $2.5 trillion, applying the same ratio would mean that possibly $500 billion could be lost or would be lost soon because of loss of private keys and/or seed phrases. That represents the entire value of Tesla being potentially lost, just because no good solution was put in place in order to prevent such a massive loss of wealth. The impact on the Cardano and the wider crypto community is therefore measured at the size of a top 15 company in the world.

• Impact: we hope to demonstrate that Cardano can also be used as a leading blockchain for innovations around Self Sovereign Identity, and in our particular case, for the safe transfer of assets after death. The crypto world would benefit enormously from such a solution, and Cardano would be seen as a provider of solutions for the entire eco-system. although it will be difficult to measure quantitatively the impact of this research project, it is very clear already that it has the ability to facilitate the transfer of Digital Assets for millions of end-users, if/when implemented.

• Dissemination: An open source GitHub at https://github.com/incubiq/one_crypto_pass will be created, and can be followed by the community. Further video recordings will be shared, and the project outcomes will be presented to the Catalyst and Cardano communities.

[CAPABILITY & FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

In the past few years, I have personally developed from start to finish, 3 different projects, which all combined, prove my capability to conduct this research project and deliver it within the set milestones. Here are those projects and acquired credentials:

1/ a cloud-based SaaS secret sharing app (authenly.com) - although it does fairly more than "just" encoding / decoding secrets, its approach to keeping secrets safe (encoded and offline, via QR code) is the premise for how to establish secure secrets, and pass them with conditions.

2/ a wallet authentication system (SignWithWallet.com) - which identifies a user via its wallet's public key, and works cross chain for signing authentication messages via private keys.

3/ a Digital Identity and Verifiable Credentials project for AIs (https://milestones.projectcatalyst.io/projects/1100164) - which makes extensive use of Self Sovereign Identity and Verifiable Credentials

I have also delivered two Catalyst projects on time and on budget (Fund8: NFT Picture Profile AI generator ; Fund9: Sign-in with Cardano) ; I am currently delivering another project in Fund11 : Identity solution for Autonomous AIs living on Cardano. I believe that in the past 2 years since joining Cardano, I have shown a total transparency and 100% accountability to deliver projects to the Catalyst and Cardano community.

I am also part of the Atala Prism pioneers and a regular active member of their developer community. As part of the wider Cardano Developers Community, I also hope to leverage my connections and validate my choices, as well as brainstorm other ideas, with the most knowledgeable devs within my circle.

[PROJECT MILESTONES] What are the key milestones you need to achieve in order to complete your project successfully?

M1 - Research

I will use the first milestone to spend time researching the best solutions for conditional sharing of secrets via Decentralised Identity. In particular:

• Special Purpose one-time private key: researching the combination of One-Time Pads and Single Use private keys with Verified Credentials

• Conditional Triggers: research into how to embed conditional triggers into the Verifiable Credentials, and the possible necessity of having a DApp to execute the condition.

• AnonCreds / DApp: research into AnonCreds and how to apply them, as well as how we can bypass the use of a DApp, or if a DApp is strictly necessary.

• More yet unknown research, pending on various findings

Milestone outputs

• up to date GitHub repo
• prototypes and/or test scripts validating all research areas
• video recording explaining tech choices

Acceptance criteria

• Either the research leads to a final workable design
• Or if no good solution, any backup plan, or alternative design with a list of all potential restrictions

Evidence of milestone completion

• GitHub is updated with all milestone deliveries
• Video recording of all progress

M2 - Design and PoC

I will use the second milestone to finalise the architecture design, and provide a small Proof of Concept. I have assigned a full month (20 days) for this task, although it may be that I spend a few more days /weeks (at no extra cost), if it is necessary for the best possible outcome.

Milestone outputs

• up to date GitHub repo
• Final architecture design
• At least one Proof of Concept (PoC) showcasing the conditional transfer of digital assets
• video recording of PoC

Acceptance criteria

• Delivery of a workable PoC

Evidence of milestone completion

• GitHub is updated with all milestone deliveries
• Video recording of the PoC

Final - Close-Out report

This is the final milestone, including a close-out report, community engagement, and demo video recordings.

Milestone outputs

• Up to date GitHub repo
• A working design and associated Proof of Concept (or a proof of no working design + alternatives, if impossible to deliver the best case scenario)
• Participation into Catalyst and/or Cardano events to showcase the solution
• Video proof

Acceptance criteria

• A video proof of all the work, including all retained design for the final solution

Evidence of milestone completion

• GitHub is updated with all milestone deliveries
• Video recording of the design of a working solution (unless no working solution, in which case video recording of what did not work)

[RESOURCES] Who is in the project team and what are their roles?

The project team consists of Eric Duneau, who will do the Research, Design, and PoC development. Eric brings extensive experience in the software industry, with over 20 years of experience and prior experience as CEO/CTO of a $30 million software business. After successfully selling the business in 2019, Eric has redirected his focus towards AI and Digital Identity projects on Cardano.

Eric has a proven track record of delivering projects within the Cardano ecosystem, and has set a delivery deadline for this project of 6 months. Note that this project is estimated at 45 days at most, which is less then 2.5 months full-time. Therefore, it is set on a path of "easy to achieve" deadlines over 6 months.

[BUDGET & COSTS] Please provide a cost breakdown of the proposed work and resources

The budget of the entire project is calculated at ₳65,333. However, since this is a project with higher risk than normal, I have take the decision to discount it by more than 50%, and offer this proposal at a cost of ₳32,000. The original budget was calculated as follows:

• Cost per hour: dev at $85 ph ; test and risk mgt at $55 ph ; doc and marketing at $35 ph
• Total number of days = 45, for an average of $81 per hour across the project
• ADA/USD conversion rate: 0.45 (taken on 6th May 2024)

The table below explains the "true" cost per each activity (before a 51% discount):

In summary, the final budget retained for each milestone is as per below:

• Milestone 1 (Research) : ₳12,500 (42%)
• Milestone 2 (Design and PoC) : ₳15,000 (50%)
• Final Milestone (Close-out Report) : ₳4,500 (8%)

Total = ₳32,000 ($14,400 ; 45 days ; $40 per hour)

[VALUE FOR MONEY] How does the cost of the project represent value for money for the Cardano ecosystem?

The cost of the project represents excellent value for money. As the sole resource, Eric is based in the UK, where he generally command a rate way in excess of the average $40 per hour agreed for this project (45 days, for 32,000 ADA).

The project's cost accounts for 0.3% of the allocated budget for this category. If all projects deliver comparable value, it would allow for the funding of 325 projects in this category alone, which is a larger number than the 314 projects which were submitted in this category. Basically, if everybody else showed the same restraint and value for money, it could be possible to fund all the projects!

This project addresses how to share secrets between two unrelated entities via Digital Identities and Verifiable Credentials. It is a critical aspect of wallets security and safe asset transfer based on conditions. It would work cross-chain but would benefit Cardano first, as fees for generating the safe secret exchange would be paid in ADA.

The reach is wide, and the opportunity to place Cardano as a global leader in secure but conditional asset transfer built on a Trust Framework is not to be missed.

Finally, the project was made as high-value as possible, by those two factors:

(i) the project's costs have been carefully considered and slashed by more than 50% of real cost, to reflect a small investment for what is mostly a research project ;

(ii) the project duration has been extended from 2.5 months to 6 months to allow for potential difficulties in the research and design phases, whereas any additional work would not cost any extra ADA to the Community.

I believe that by delivering exceptional value for money, at 32,000 ADA, this project maximises the impact of the allocated resources and aligns with the goals and aspirations of the Cardano ecosystem.