What is KILT and the KILT Protocol?

Mar 28, 2023 - 5 min read

What is KILT and the KILT Protocol?

KILT is a parachain in the Polkadot ecosystem that provides secure, scalable, and decentralized digital identity solutions. Polkadot aims for interoperability and offers its own development framework, Substrate, in order to spin up parallel blockchains, called parachains that source security from Polkadot’s Relay Chain.

KILT provides the infrastructure for decentralized and digital identities, by enabling the generation of identifiers and the creation, issuance, and verification of digital credentials, leveraging trustless and immutable blockchain technology to ensure data privacy as well as the control over this very data. Its open source blockchain protocol enables the issuance of credentials within Web3 that are verifiable and revocable. As it provides a Software Development Kit (SDK), anybody can build applications and services on top of the KILT infrastructure.

KILT enables individuals, organizations, and enterprises to claim arbitrary attributes that are then attested by trusted entities. Claimers of attributes are in full control of their data and decide with whom to share which data, and have the ability of hiding certain information for privacy protection.

The Beginnings of KILT

The idea of KILT Protocol was born in 2018 after Ingo Rübe recognized the potential of blockchain technology in solving certain problems seen in Web2. KILT’s original White Paper was released in May 2019 and its tokenomics were initially published in August 2021. Notably, the tokenomics were designed to be slightly inflationary to achieve long-term sustainability and stability.

KILT mainnet initially launched within Polkadot’s pre-testing environment Kusama in September 2021 to solve digital on-chain identity via self-sovereign decentralized identifiers (DIDs) and Verifiable Credentials. Following up in November 2021, KILT moved its governance from BOTLabs GmbH, its initial developer, into the hands of its KILT token holders. The launch on Kusama allowed KILT to iterate faster and enabled applications and services atop KILT to thrive. As such, leveraging self-sovereign identity (SSI) was enhanced by building blocks “built on KILT” like Sporran, a wallet for KILT Coins and credentials, Stakeboard, a staking platform to back KILT collators, SocialKYC, an identity verification service for social media credentials, DIDsign, a solution to sign files using the user’s DID within the browser, web3name, a cross-ecosystem name service linked to addresses, and AssetDIDs, an identifier to ensure NFT authenticity across multiple chains.

In October 2022, KILT became the first parachain that fully relocated from Kusama to Polkadot. With the transition to Polkadot, they moved from a very dynamic chain to a more stable, production ready and even more secure environment allowing KILT to provide enhanced, secure, and decentralized digital identity solutions ranging from individuals to enterprises.

What is Digital Identity?

We are used to credentials such as passports or educational certificates in meatspace, that are prone to trust and control issues. This becomes especially obvious in Web2, where users usually lose control and privacy to centralized institutions that monetize their data. This not only leads to an increased security risk as we’ve seen multiple times with large scale data breaches, but bears also massive centralization risk.

Digital identity solutions built on distributed ledgers now offer a highly scalable, privacy preserving, secure and cost effective way to gain back control and privacy over the user’s data in a self-sovereign fashion. SSI in that context offers users a legitimate path towards Ownership and control of their digital identity, while parties requesting the credential are easily able to verify who issued it.

How KILT Works

KILT implements the W3C standards for Decentralized Identifiers (DIDs) and Verifiable Credentials, enabling decentralized and digital identities as a fundamental component of Web3, the next-generation Internet. KILT Protocol facilitates the generation of the identifier (DID) on the user’s device and the issuance and possession of credentials. An attester generates a credential at the request of a user (claimer) that describes specific attributes, which the attester can verify. The attester issues the credential to the user. KILT maintains a checksum (hash) of the credential on the KILT blockchain. The blockchain technology permits users to demonstrate the authenticity and validity of their document to anyone they choose. KILT is designed with privacy in mind and does not store any personal information on the blockchain. The personal data is however stored in the credential, while the blockchain only stores hash values. When a user wants to verify a particular attribute to a KILT-enabled service, they share  a credential with the respective service. If the receiving service (verifier) trusts the issuing entity (attester), it can verify the credential’s validity by creating the hash value and verifying its presence on the KILT Blockchain.  

The token native to KILT Protocol serves three primary functions: on-chain utility, payment, and staking.

On-chain utility: KILT can be locked for voting rights in on-chain governance where an increased locking duration increases voting power, known as conviction voting. KILT is also needed to anchor credentials, DIDs, CTypes and trust hierarchies.

Payment: for digitally revocable credentials, claimers can pay attesters, while attesters pay transactions fees in order to anchor these credentials on the blockchain.

Staking: staking rewards incentivizing collators, who hold the data of the KILT blockchain, to collect transactions and build blocks. They also incentivize delegators to back trusted collators and hence increase trust and security within the system.

Outlook on KILT

While services and applications flourish already within the KILT identity ecosystem, one of the main goals is fostering adoption of the underlying solutions to achieve the higher goal of returning control of personal data to individuals in a decentralized way, rather than digital identity owned by a few monopolies. According to its roadmap, more enterprise integrations utilizing KILT credentials and DIDs are on the horizon. With AI being on the rise and data harvesting from Web2 companies being more invasive than ever, the time for digital, self-sovereign identity could not be better and KILT is well positioned to capture market share.

*KILT now available in the Bitcoin Suisse Vault


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