zCloak Network's full-chain KYC product Legit ID is officially launched

On November 6, 2023, zCloak Network's latest full-chain KYC product Legit ID (legit3.id) officially launched. zCloak is a privacy-first decentralized digital identity and trusted credential infrastructure aimed at establishing a new identity data system and trust transfer paradigm in the Web3 era. The emergence of Legit ID will reshape the industry landscape in the fields of digital assets and digital identity.

Dr. Zhang, the founder of zCloak Network, stated: "While maintaining the decentralized and open core of Web3, necessary regulation and compliance are also crucial. We are like explorers in the Wild West, ready to bring law and order to that 'land' through technological means." Looking back at the development of the Web3 industry, blockchain technology has always been known for its openness and anonymity, and the emergence of numerous DeFi protocols and RWA assets on-chain has brought profound changes to the financial sector. However, this has also led to a series of daunting challenges, with the most tricky and severe issue currently facing the industry being regulation and compliance.

Exploring Regulatory and Compliance Issues in the Digital Realm

In the digital world, the existence of global regulatory and compliance rules can effectively suppress and combat illegal financial activities, protecting consumers and investors. However, the decentralized and permissionless nature of blockchain inevitably raises concerns among ordinary users regarding asset security, data privacy, and information jurisdiction.

In light of the growing regulatory demands in the Web3 ecosystem, governments and major regulatory bodies have been seeking solutions, attempting to find a regulatory approach that is both compliant with the decentralized characteristics of Web3 and reliable. With the rise of RWA tokenization, solutions such as KYC (Know Your Customer) and AML (Anti-Money Laundering) have gradually gained more attention, and the industry generally believes that this is the necessary path for on-chain application compliance. Although KYC and AML are highly effective in verifying legitimate transactions and preventing illegal on-chain activities, the implementation of traditional KYC in Web3 still faces significant resistance. We believe the main reason is that traditional KYC solutions infringe upon the full anonymity and privacy principles that Web3 users are accustomed to.

This indicates that we need a new KYC solution that can meet global regulatory requirements while protecting user privacy, which is why zCloak Network has introduced Legit ID. Legit ID is the result of zCloak's years of deep exploration in zero-knowledge proofs and DID. The phrase "One KYC for All Chains" perfectly summarizes the core feature of Legit ID. It only requires users to undergo KYC verification once, allowing for full-chain KYC proof globally. While sharing identity information, it fully practices the concept of personal data sovereignty advocated by Web3. Based on zCloak's long-term technological accumulation, Legit ID utilizes zero-knowledge proof technology and decentralized identity systems to achieve KYC services that are centered on security and privacy.

Core Advantages of Legit ID

First, a notable feature of Legit ID is its full-chain availability. Legit ID uses DID and VC protocols under W3C standards to store KYC result data off-chain, employing a unique self-verifying data on-chain technology to replace oracles, enabling easy data sharing with smart contracts across multiple chains, including Ethereum, Solana, Sui, and any layer 2/3 public chains, while ensuring data authenticity. Users not only gain true sovereignty over their identity data but can also flexibly use their KYC verification results to drive smart contracts in business operations without executing traditional cross-chain messaging.

Second, Legit ID can provide real-time AML data updates for user addresses at the protocol layer. It is well known that identity compliance monitoring is not a one-time operation. An address that is compliant today may participate in illegal financial activities tomorrow. Therefore, merely putting KYC results on-chain is far from sufficient; it also requires dynamic AML/CTF monitoring to further reduce risks. Legit ID collaborates with the on-chain data security project Chaintool to provide second-level AML alerts to all parties involved in transactions, aiming to protect enterprises, investors, and a wide range of individual users from the threats posed by illegal addresses.

Additionally, Legit ID supports project parties in customizing the content of identity information verification. The user information obtained by third-party smart contracts can be a simple KYC check pass/fail status, an anti-money laundering risk score, or more complex identity information based on zero-knowledge proofs. Legit ID can transmit various elements of user identification, including geographical range, age range, income level, credit rating, and risk preference, to smart contracts while fully protecting user privacy. The richness and detail of the proof results can be quickly customized according to the specific needs of each verifier.

Finally, Legit ID provides enterprises with a low-cost, easy-to-integrate solution for authenticating user identities. The Legit ID product operates on a subscription basis, and its usage cost is significantly lower than the cost of project parties contacting KYC companies for identity verification. It also has substantial advantages in integration time and business processes. Project parties do not need to modify any existing business logic; they can simply access the contracts deployed by Legit ID to obtain complete user identity information.

In summary, Legit ID is an innovative identity verification platform that offers full-chain availability across multiple blockchain platforms, as well as real-time AML monitoring and alert systems to enhance compliance and security for enterprises and users. In addition to regulatory and compliance use cases in the financial sector, Legit ID can also play a significant role in scenarios such as on-chain anti-witch hunts, DAO governance, and personality verification.