Civic: Digital Identity Solutions for Web3

Blockchain Identity Verification and Self-Sovereign Identity

Your digital identity is the personal record of your data, credentials, and identifiers that exists throughout the internet. It can include anything from passwords to account numbers, browser history, and social media profiles. With so much of our lives taking place online, today’s internet users are growing increasingly aware of the importance of actively managing their digital identities to avoid data breaches, hacks, and non-consensual data monetization. Instead of relying on centralized databases or large institutions to maintain private data as is the standard on Web2 platforms, newer forms of digital ID verification are using emerging technology like cryptography, AI, and blockchain-based identity solutions to increase security and user control.

Maintaining personal control of your personal data means you share only the specific data required for a data transaction, while allowing the rest of your data to remain private. For example, you could share your age — without sharing your address — in order to purchase an age-restricted product. This is an example of what’s called self-sovereign identity in practice. Blockchain identity management tools also streamline platform onboarding for both the applicant and the vettor. They can cut down on fraudulent activity like online impersonation, account takeover attacks, and countless other forms of online fraud.

With the growth of decentralized finance (DeFi) and decentralized exchanges (DEXs), many institutional investors and investment firms are interested in participating in this dynamic sector. However, due to various regulatory requirements, there remains a lack of clarity around established standards for data and privacy in the emerging world of Web3. Blockchain identity verification solutions offer a way to satisfy Anti-Money-Laundering (AML) and Know-Your-Customer (KYC) requirements in a globally standardized way while saving time and money. Importantly, to satisfy compliance requirements for certain DeFi services, companies must be able to store customer information for prescribed periods of time. Civic offers tools to help form a bridge between dynamic regulatory requirements and Web3. By using blockchain-based digital identity solutions like Civic’s identity management tools, institutions are finding a way to engage in DeFi with confidence in its underlying architecture.

The Civic Solution for Blockchain-Based Digital Identity

Launched in 2015, Civic offers tools that allow each user to verify their identity once, and then reuse their verified identity wherever the company’s services are used. The company offers Civic Pass, which is an on-chain solution that enables decentralized apps (dApps) to restrict access to their offerings by vetting users in a way that protects users’ privacy while giving dApp creators and users the freedom to use a dApp with the knowledge that all other participants have passed KYC or liveness criteria.

Civic Pass is the flagship Civic identity management product. The online tool offers global blockchain identity verification, IP location checks for security, and permissioned DeFi access for everyone from retail investors and liquidity providers to dApp creators and institutional investors. As Civic Pass is an on-chain solution, end users can interact with dApps through either a user interface (UI) or an application programming interface (API), safe in the knowledge that all the other dApp users have been vetted. Liquidity providers, dApp developers, and institutional participants can manage risk and create trust in the crypto ecosystem with Civic’s tools. Users of Civic identity management tools can select from the following checks: real person liveness check (ie. no bots); global identity verification (KYC); watchlist screening and ongoing monitoring (Office of Foreign Assets Control (OFAC) reviews, sanctions lists, Politically Exposed Person (PEP) checks, etc.); IP-based location checks including VPN detection; and email and phone verification.

Available in over 190 countries, Civic Pass can be used for a variety of applications both inside and outside the crypto world. For example, its age and identity verification applications can be used throughout the internet. However, Civic Pass is built to offer Web3 functionality in particular. Some crypto-specific features and tools within Civic Pass include:

Civic Pass for NFTs: This anti-bot tool can be used for non-fungible token (NFT) drops, sales, and auctions to ensure fair participation and flag for bots attempting to game systems. It does this by using artificial intelligence (AI) to verify buyers through a video-based screen capture authentication process. It also allows an optional KYC and AML layer for high-profile NFT releases. One integration example is the Candy Machine NFT minting tool from Metaplex.

Civic Pass for DeFi: In 2021, the total value locked (TVL) in DeFi exceeded $160 billion USD. With the burgeoning growth of DeFi and DEX trading volume, many jurisdictions are more closely scrutinizing this space. Depending on location, these DeFi products, services, and dApps may have to meet certain regulatory requirements. While wanting to remain within the letter of the law, many institutions and high-net-worth individuals (HNWIs) are interested in gaining access to DeFi investment and trading opportunities. In addition to KYC and AML, these institutions may also have to deal with legislation from the Office of Foreign Asset Control (OFAC), Financial Action Task Force (FATF), and various Counter-Terrorism Financing (CTF) standards. By offering dApps a built-in Civic identity layer, the Civic crypto team aims to enable permissioned access to dApps and DEXs for the institutional investment crowd — by baking compliance directly into an opt-in Civic digital identity solution. A Civic KYC or Civic AML check may also be required for retail investors, which can also be achieved through a Civic identity check. For example, Solrise DEX Pro is a permissioned DEX that leverages KYC through Civic Pass.

Civic Pass is designed to enable faster and more cost-effective onboarding through the use of an AI-optimized verification system that is paired with a human review process to catch fraud and stay compliant with AML and KYC regulations. No personally identifiable information (PII) is stored on the blockchain — only a hash (an attestation) related to the pertinent data. This is one security layer designed to protect the PII of Civic identity users from potentially malicious actors. Another key feature is the ability to verify specific parts of your CIVIC ID without the need to share everything contained within it. For example: imagine being able to verify your nationality without including other related information — even your name.

Tokenomics of the CVC Token

The Identity.com ecosystem that Civic leverages is powered by its civic token (CVC), which functions primarily as a utility token. The CVC token uses the ERC-20 standard and is used to settle transactions between users. There is a hard cap of 1 billion CVC tokens.

Civic Crypto Partnerships and Blockchain Identity Integrations

In March of 2021, Civic announced an integration with the Solana blockchain. While initially focused on Ethereum, this update was made to utilize Solana’s high throughput and low transaction costs.

Civic has also partnered with non-profit Identity.com, an open-source identity ecosystem that provides decentralized protocols and tooling for issuance and verification of identity related information in on- and off-chain applications. Identity.com has also integrated with Solana to provide a blockchain identity management marketplace for identity providers, requesters, and validators.

Civic Identity Solutions for DeFi and Beyond

Creating self-sovereign and blockchain-native identity solutions in Web3 represents a major focus for blockchain and DeFi platforms, and will have a profound impact on the architecture of the internet going forward. In today’s crypto landscape, some stakeholders are eager for more regulation and legal clarity, while some crypto purists champion permissionless networks and decentralization. Civic offers a balance between helping protect people from harm, without impeding innovation by contributing value to those on either side throughout its line of products. Most importantly, Civic delivers privacy and control to users, and a path towards a better identity verification ecosystem for Web3.