Verifiable Credentials Tree

Creating a verifiable credential tree for Portuguese government fund distribution to ensure the right to redeem the funds.

Lead Software Engineer, Plutus Pioneer, Atala PRISM Pioneer, Emurgo Cardano Architecture and Design Developer Professional

How does the problem look like?

In Portugal (as in so many other countries), the Government have to distribute funds to other entities (departments and companies). This process lacks transparency as it is not clear who can access the funds and under which conditions. We found that this is being tackled by adding more layers of complexity making the process cumbersome and difficult for small businesses to participate. Apart from that, it's difficult if not impossible for the citizens to ensure that the funds are being well spent.

To participate in these funds, the private companies have to register on a platform. After that, a government department will select the companies that match the criteria. This process lacks transparency and the funds can't be tracked by the stakeholders.

How will we solve the problem?

All the intervenients (issuers, holders and verifiers) in the process must be registered on our truth registry. This information will be publicly accessible. We will create a framework to validate that our funds came from the root issuers and that each branch has access to that fund. The Atala PRISM verifiable credentials framework will allow storing the issuers' information on the blockchain to improve transparency, security and interoperability.

Trust framework

* Issuer

• Bank of Portugal; Holder previously verified by the credentials chain

* Holder

• Portuguese government departments; Companies; Individuals

* Policy Maker

• Portuguese government;

* Relying Party

• Portuguese tax administration

* Point of engagement

• Funds assessment

Trust framework Summary

Our goal is to create a framework for government funds distribution. The government will issue credentials for the holders to access determined funds. The holders issue new credentials to sub-holders that are able to access part of these funds. The verifier should ensure the chain of credentials and process accordingly. The result will be a tree of credentials where holders can access their corresponding part of the chain.

Attached diagram details

1. The Bank of Portugal registers on our system all the available funds

2. The entities (Government Department A, B and Company A) with access to those funds ask the issuer (Bank of Portugal) for the access credential

3. After being issued verifiable credentials, each entity can create in our system categories. This will allow that entity to issue verifiable credentials to other stakeholders (entities/departments/employees). The categories branching can have an infinite depth, meaning that each holder can potentially become an issuer in our system. This is the example of:

• Government Department A has created a fund A category and then issued a verifiable credential to Government Department C
• Government Department B has created a fund B category and then issued a verifiable credential to Company B
• Company A has created two fund C categories and then issued a verifiable credential to Company A Departments A and B

4. The leaves in our verifiable credential tree are the holders that haven't registered in our system in any category. In practice, this means that this entity will have access to all the funds in his category depth. As we can imagine, as much granularity we have the best, this way we can best identify who is spending what. A great example of this is Company A, which tracks each fund at the employee level. Company B doesn't have registered as an issuer, meaning that we will not have visibility to what is happening below his category level

5. It will be possible for a holder to have multiple credentials to access different funds. This is the case of Company A, employee 2

Roadmap (a.k.a. definition of success)

Q1

(partially funded by fund 7)

• Team formation
• Engage with the Portuguese government
• Partner with a Portuguese University for Proof of Concept (Nova SBE Finance)
• Research/PoC development
• UI/UX research

Q2

• UI/UX refinement
• Minimum Viable Product development
• Test & refinement with our Partnered University
• Marketing for non-government community
• Verifiable Credentials Tree framework development
• Portuguese government followup

Q3

(partially funded by fund 7)

• Open source our Verifiable Credentials Tree framework (kotlin)
• MVP go-live with our Partnered University (Multiplatform)
• Portuguese Government solution presentation
• Non-government community growth

Q4

(not funded by fund 7)

• Portuguese government MVP
• Partner with other strategic institutions with similar requirements
• Improve our solution based on the feedback
• Expand the verifiable tree framework to support verifiable DAGs (direct acyclic graphs)
• Continue our community expansion

Staff team

Pedro Pepê: Lead Software Engineer (https://www.linkedin.com/in/pxpepe/)

Carlos Pais: Chief Financial Officer (https://www.linkedin.com/in/carlos-pais-83a93814/)

Budget

• 2x Software engineer, six months (960h) -- 20$/h * 960h * 2 engineers = 38,000$
• 1x Marketing/Community maker, six months part time (480h) -- 10$/h * 480h * 1 marketeer = 4,800$
• 1x Designer & UX/UX, six months part time (480h) -- 10$/h * 480h * 1 marketeer = 4,800$
• 12x stackeholders sprint meetings, one each two weeks -- 200$ per meeting * 12 meetings = 2,400$

Public Launch date

It is expected the first version to be released in early Q3 2022.

As a result, we will have three deliverables:

• A framework implemented in Kotlin will allow verifying a tree of credentials. Meaning: the issuer will have a category (which will depend on how deep he is the tree); the holder could be a leaf (can't issue to sub-branches) or a branch (can issue to sub-branches); the verifier should be able to understand the depth of the holder on the verifiable tree;
• A backend implemented in Kotlin will allow managing off-chain data. In our use case, this will represent the government fund distribution and the corresponding main issuers. This legacy part will later be moved to Cardano smart contracts and side-chains to keep all the information trackable;
• A multiplatform (Web, IOs and Android) frontend implemented with React Native which will allow all the users (Issuers, Holders and Verifiers) to interact with our solution.