Cardano Circular Economy Ecosystem

Ecosystem of circular economy participants that interact by issuing, holding, and verifying identity and sustainability claims on Cardano.

20+ year veterans of the software industry with a passion for building circular economy solutions.

Plan in Detail

A trusted circular economy ecosystem must incorporate a governance framework that brings oversight, authority, and accountability to participants that privately interact by issuing, holding, presenting, and verifying identity and sustainability claims. A governance framework must be administered by a decentralized autonomous organization (DAO), and the power to form the DAO is granted by the people who vote to fund this proposal submitted to the Catalyst Fund 7 Accelerate Decentralized Identity track.

Our plan is to witness the Cardano Circular Economy Ecosystem (CCEE) DAO as a PRISM DID using a single master key on the Cardano mainnet. The seed phrase for the master key will be locked in a steel capsule and held in an escrow under the control of the DAO proposers.

We recognize that the DAO DID is non-portable, the DID document is lacking key management features such as those available in the Key Event Management (Keri) infrastructure, and all digital signatures use a single signing key due to limitations in the PRISM SDK. Our plan is to work with the PRISM team to understand how Cardano can close these gaps in future versions of the PRISM framework.

We also recognize that the CCEE DAO will not be born as a legal entity. If the DAO needs to be a legal entity then we will register the DAO in Wyoming and enlist a GLIEF LOU to issue a verifiable legal entity identity (vLEI) claim for the DAO DID. Initially this may require a DID to be created in the Sovrin legal entity decentralized identity ecosystem but we imagine that this will be rationalized in a future Cardano legal entity decentralized identity ecosystem that interoperates with Sovrin.

Our plan is to bootstrap the governance framework by first hierarchically deriving a DID using the DAO master key and the "m/0'/0'/1" derivation path, and then using the DAO issuing key to issue the first iteration of the CCEE governance framework as a set of rules committed in verifiable claims on the Cardano mainnet, and accesses.

The text of all DAO and governance framework claims will be stored transparently as content addressable documents on the Filecoin decentralized storage network for a period not less than three years, and the content addresses will be included in DID claims. Future versions of the governance framework will be authorized by a DAO voting smart contract integrated with existing Cardano crypto wallets. The governance framework text will be a JSON encoded claims that encode the rules of interaction in the CCEE.

The first rule of the trusted CCEE is to only trust claims issued and verified by members of a legal entity trust registry. Our plan is to accelerate decentralized legal entity identity on the Cardano blockchain by adopting the current GLIEF/GS1 legal entity registry that is backed by government authority. The following trust registries will be evaluated for adoption by the CCEE governance framework.

• The Global Legal Entity Identifier Foundation [1] (GLIEF) trust registry was set up by the G20 to support the task of legal entity identifier adoption. The foundation is backed by the LEI Regulatory Oversight Committee. A LEI [2] is a 20-digit unique code defined in the ISO 17442 standard. A LIEF must be purchased and GLIEF hosts a registry of legal entity [3] identifiers that can be searched for free.

• The GS1 [4] trust registry was set up by a reputable global organization that hosts a registry of GS1 identifiers [5] that is used to prefix trade identification numbers. GS1 is also an accredited GLIEF Local Operating Unit [6] that maintains a mapping between GS1 company prefix numbers and LEIs. GS1 is now able to issue LEI's across the globe.

The second rule of the trusted CCEE is to only trust sustainability claims issued to products that are listed in a trust registry, and that can be bound (twinned) to physical products with data carriers such as bar codes, QR codes, RFID tags, etc. Our plan is to accelerate decentralized product identity on the Cardano blockchain by adopting the current GS1 product registry that is backed by industry reputation.

• GS1 is a reputable global organization that issues Global Trade Item Number [7] (GTIN) to identify products and they provide data carrier standards to bind physical products to digital identities. GS1 hosts a product registry [8] that can be searched for a fee.

The third rule of the trusted CCEE is to only trust legal entity and product identity wallets and DApps that are listed in a trust registry. Our plan is to accelerate decentralized wallet and DApp decentralized identity on the Cardano blockchain by adopting the Cardano DApp Store that is backed by IOHK and certifications. We would like to see the Project One wallet be extensible so that it can become a crypto, legal entity identity, and product identity wallet. Project One will be trusted to directly interact with the Cardano blockchain and not require centralized hosting intermediaries. For the same reason we would prefer PRISM to be implemented as a smart contract that can be directly accessed by the Project One wallet as opposed to the current implementation as a centralized hosted node.

The fourth rule of the trusted CCEE is to only exchange claims off-chain that conform to a governed identity and sustainability claim schema that is hosted on the Filecoin storage network and referenced in a governance framework claim. This schema will be developed from the verifiable Legal Entity [9] (vLEI) standard, the GS1 Global Traceability Standard [10], and ISO/IETF standards for datums such as date time formats and language codes. We plan to work with IOHK to create a GIT repo that encourages open source development of the schema similar to the one used for vLEI schema development [11].

We plan to use the EU battery passport regulations and the battery circular economy as the use case for converging on the details of the components that comprise the CCEE. There are three reasons for this.

• There is already an EU regulation on electric vehicle battery passports [12].

• The Everledger blockchain [13] already has a solution for electric vehicle battery passports but it is not based on public decentralized identity. Everledger has developed their solution with partners such as the Global Battery Alliance [14] and Tesla.

• GS1 and the Battery Alliance have signed an MOU [15] to develop a product passport for batteries.

Our plan is to create a sustainable ecosystem that is self-funded by transaction fees so that DAO administration and CCEE expansion can be funded. We also recognize that a CCEE explosion is only possible when Cardano makes it possible for legal entities to pay for transactions using the Djed stable coin. For these reasons we would prefer PRISM to be implemented as a smart contract that integrates founders fee, and Babel fee payments. We plan to work with the PRISM team to motivate for these features.

Our long-term plan is to add smart contracts to the CCEE that provide product ownership and product location tracking and tracing. For this we need Hydra to for off-chain scaling, we need Plutus to support number theory functions to validate RSA accumulator proofs, and we need homomorphic encryption of claims stored in IFPS storage networks.

Funding

We plan to raise funds by submitting proposals to Catalyst until the CCEE can sustain itself with transaction fees. We also recognize that this vision of an accelerated Cardano Circular Economy Ecosystem is only possible with the participation of GS1 and we are confident our participation in the PRISM pioneers program will help overcome this barrier. For these reasons we are asking for $50,000 to cover the cost of forming the CCEE DAO and developing the claim schema to verify legal entity identity, and battery sourcing, reuse, resale, and recycling circular economy events.

Metrics

• Establish CCEE DAO identity on the Cardano mainnet and publishing of the first version of the governance framework on Filecoin.

• Version 0.1 of the CCEE governance framework using a GIT repo in the IOHK organization.

o Schema specification for legal entity, and product identity verification.

o Schema specification for past, present, and future battery sourcing, reuse, resale, and recycling event verification.

• Proof of concept using a PRISM CLI wallet.

Definition of success

Compute the following tasks within 3 months of funding.

• Catalyst members voting for this proposal that grant us the power to form the CCEE DAO and governance framework.

• Securing the advice and cooperation of GS1.

• Securing the advice and cooperation of TOIP.

• Securing the participation of IOHK PRISM, Project One, and DApp store teams.

• Publication of the CCEE DAO and governance framework.

References

1. https://www.gleif.org/en/

2. https://managedlei.com/blog/what-is-a-legal-entity-identifier-lei/

3. https://search.gleif.org/#/search/

4. https://www.gs1.org/

5. https://www.gs1.org/services

6. http://www.gs1mu.org/news/gs1-now-gleif-accredited-local-operating-unit-lou-and-able-issue-legal-entity-identifiers-leis

7. https://www.gs1.org/standards/id-keys/gtin

8. https://www.gs1.org/services

9. https://www.gleif.org/en/lei-solutions/gleifs-digital-strategy-for-the-lei/introducing-the-verifiable-lei-vlei

10. https://www.gs1.org/standards/gs1-global-traceability-standard#2-Traceability-and-the-importance-of-standards+2-5-GS1-standards--key-enabler-for-interoperability

11. https://github.com/WebOfTrust/vLEI/tree/main/schema/common

12. https://www.globalcompliancenews.com/2021/04/05/all-europeeu-commission-proposes-new-regulation-for-sustainable-batteries110321/

13. https://everledger.io/batteries/ev-battery-passport-eu-regulations/

14. https://www.globalbattery.org/battery-passport/

15. GS1 and the Battery Alliance have signed an MOU