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@Dusk
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Fintech scale-up Dusk Network presents Citadel, a zero-knowledge proof KYC solution where users and institutions are in control of sharing permissions and personal information. The framework can be used for all claim- based KYC requests and puts users in total control of what information they are sharing and with whom while being completely compliant and private at the same time.
After months of research and submitting the official paper to arXiv, Citadel finally launches. It is one of the first decentralized Know Your Customer (KYC) solutions focusing on the financial ecosystem, that invites institutions to use the technology for cost-reducing compliance. As the user is in charge of his own data, it isn’t necessary to do KYC with service providers that have already been used prior. Or for example, multiple KYC processes for the trade of one asset. How does Citadel work
Dusk Network is the first to integrate zero-knowledge technology KYC in a Layer-1 (L1) blockchain. It is a key feature of Dusk Network itself to implement it in its privacy-preserving protocol. Using the Citadel framework, an entity that is able to handle private information - for example, the company Dusk who is compliant with all necessary regulations and is allowed to handle private information, or a company that is verified to do KYC on behalf of institutions - can provide a list of requirements for their KYC verification. The user who needs to provide the KYC verification is able to provide the necessary information, share how long their information can be stored and can withdraw access to their data. The company will authenticate the data, which will be privately stored in the Dusk blockchain. To simplify: it is using non-fungible token (NFT) technology, where instead of an art piece, a license is created.

Related Works

Bitcoin [Nak08] introduces the notion of a blockchain as well as the Nakamoto consensus mechanism. An alternative mechanism known as Proof-of-Stake is subsequently proposed by [KN12]. Numerous other works build upon the con- cept introduced in [KN12] to instantiate variations of Proof-of-Stake-based pro- tocols such as [Ben+14b; Goo14; DPS16; Mic16; Kia+17; Dav+18; GOT19; Ker+19; But+20]. Related to the work introduced in this paper is [Mic16], which expands on [TA84; Mic17] to create the first permission-less Proof-of- Stake-based protocol with a negligible probability of a fork.
Monero, the largest privacy-preserving digital currency based on the market capitalization2 at the time of the publication of this paper, was originally based on [Sab13], before being amended with [Max15; Bac15; NMM16] and later with a novel zero-knowledge proof scheme called Bulletproofs [Bun+18]. Zcash, the second largest privacy-preserving digital currency based on market capitaliza- tion, proposed in [Ben+14a], utilizes [Gro16] zk-SNARK (zero-knowledge Suc- cinct Non-Interative ARgument of Knowledge) proof system in conjuction with a UTxO-based transaction model specified in [Hop+21]. Alternatively, Firo (formerly known as Zcoin) utilizes a different transaction model called Lelantus [Jiv19]. Additionally, [Fau+18] and subsequently [Gua+20] posit two different approaches to creation of a privacy-preserving account model.
[Bun+19] proposes a notion of privacy-preserving token contracts, emulating the transaction model proposed in [Hop+21] in an Ethereum smart contract. [PSS19] builds on the approach discussed in [Bun+19] to enable private trans- actions on Ethereum mainnet.
Other protocols, such as [Goo14; Dos+20; Fou20] propose solutions to create compliant security token frameworks. [Goo14] adapts the transaction model in- troduced in [Hop+21], making limited anonymity-preserving functionality avail- able to the smart contract layer of Tezos. Polymath, after initially launching as an Ethereum-based protocol, subsequently switched to developing a sepa- rate protocol called Polymesh [Dos+20], which natively supports a restricted set of privacy-preserving functions, while other features are perfomed off-chain. [Fou20] introduces a protocol with a two-channel consensus mechanism com- prised of a Proof-of-Stake-based optimistic channel and federated BFT-based fallback channel. Findora supports limited privacy-preserving functionality on- chain.

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