On-Chain Credentials
Last updated
Last updated
Polimec utilizes credentials issued on-chain by specialized, trusted third parties to ensure adequate verification of all network participants.
For issuers, it is essential to distribute their contribution token only to individuals or entities that are properly verified and have met the KYC/AML standards per jurisdictional and funding round specific criteria. Credentials ensure that a given address always meets these requirements.
For participants and evaluators, this means that KYC/AML information only needs to be shared with one trusted third-party provider, rather than repeatedly sharing sensitive data with many intermediaries and each of the issuers as required in current setups.
For this purpose, Polimec uses KYC/AML credentials. KYC/AML credentials issued by a trusted third party are anchored on the KILT blockchain. The credentials are pseudonymous, and no personal information is stored on-chain - hence all transactions and network participants on Polimec can be processed in a regulatory compliant and secure manner while preserving data privacy.
Components enabling Polimec’s on-chain credentials:
Any project can apply on Polimec to issue a contribution token, just as they can issue a mainnet token. However, all issuers must obtain an issuer certificate that is attested and issued by a trusted third party after a KYC/AML process to raise funds on Polimec.
The issuer credential provides participants in funding rounds with a trusted third-party verification of the issuer’s legal entity. It ensures accountability of the issuer, founders and people with signatory rights of the legal entity. The hashes of the credentials are directly accessible on-chain and verifiable at any time via KILT.
Evaluators, participants, and liquidity providers must also obtain a certificate attested by a trusted third party to interact with Polimec.
To claim the credential, the participant submits the information to the trusted third-party provider for conducting the required KYC/AML. After verifying the information, the trusted third party issues the signed certificate (attestation) to the participant. This attestation is cryptographically tied to the participant’s DID and included in the credential.
The hashes of the credentials are directly accessible on-chain and verifiable at any time via KILT, so regulators or authorities can access required information on participants or issuers by contacting the specialized third-party KYC/AML provider. By ensuring that all participants on the network have proper credentials based on their profile, Polimec aims to support all stakeholders in meeting regulatory requirements and provide similar participant protections to those in traditional financial markets.
To access all functionalities on Polimec, network participants must complete a KYC/AML check performed by a trusted third-party provider to claim their on-chain credentials. Network participants can initiate the credential process by visiting the third-parties’ credential issuance website.
In the next step, network participants must select the credential type they want to claim and consequently provide the requested information to perform their KYC/AML. Polimec distinguishes between issuer and participant credentials (i.e. retail, professional, institutional).
The third-party provider performs the KYC/AML checks according to the requirements or standards of the jurisdiction applicable as determined based on the information provided by the user. After receiving the requested information from the KYC/AML requestor, the third-party provider performs the KYC/AML checks and returns to the KYC/AML requestor (network participant) should there be any issue with the provided data (e.g. incomplete, unreadable, inaccurate). If the KYC/AML check is successful, the third party attests the (now) verified KYC/AML requestor by issuing the credentials to the wallet provided by the requestor in the process.
After receiving the on-chain credential, network participants can interact pseudonymously on Polimec and use all functions while remaining regulatory compliant and secure.
KYC/AML process flow to get credentials:
