Understanding SelfKey: a beginner’s guide and review

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by Manny Reimi 3 months ago • ... views • 13 replies

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Understanding SelfKey: a beginner’s guide and review

TL;DR: You can get a summary of this article on its last section

SelfKey is a decentralized identity technology and a provider of a self-sovereign identity ecosystem through its network of partners, associated products, and integrated financial services marketplace.

In this article, we will provide a review of SelfKey, exploring its history and functioning, as well as explaining its utility to the Crypto-Verse at large.

In this analysis of SelfKey, 5 different sections will be covered, as follows:

  1. legitimacy
  2. purpose
  3. tokenomics
  4. ecosystem
  5. summary.

Legitimacy

SelfKey was founded in late 2017 by Edmund Lowell , a serial entrepreneur that has been residing in Asia for over a decade. Lowell has since 2013 been the founder and CEO of KYC-Chain, a Hong Kong-based provider of blockchain-based KYC solutions for financial institutions and other enterprise clients.

Edmund Lowell photograph

The custodian of the SelfKey protocol is the Mauritius-registered SelfKey Foundation. The SelfKey Foundation, on the basis of the SelfKey Whitepaper , conducted an ICO of its KEY token in early 2018 that raised $22M in 11 minutes, without express VC or whale support, this was mostly a community-powered ICO.

SelfKey for iOS promotional screenshots

The SelfKey team has since launched on mainnet its wallet for MacOS , Windows , Linux , iOS , and Android together with a Chrome extension ; a marketplace for incorporations and bank accounts using $KEY; and had its decentralized identifier (DID) methods added to the World Wide Web Consortium (W3C) specifications registry.

Purpose & Functionality

SelfKey’s mission is to empower individuals to own, control, and manage their personal data; and, in turn, to help businesses protect personal data entrusted to them by users, and stay compliant with privacy regulators. SelfKey envisions a safer world where individuals are freer because their personal data and privacy is protected and under their control.

Example of SelfKeyID

The core component of SelfKey’s identity solution is the SelfKey ID, a collection of data points that together comprise an “identity”, for example, your name, email address, proof of residence, and identification number and documents are all part of your “identity” that, as personally-identifiable information allow a third-party to verify who you are. This data, if it were to be stored on a centralized database — like for example, in the servers of Facebook, Amazon, or Google — would be an attractive target to a hacker. In fact, all of these tech-leading companies have suffered hacks, numerous times, where your information was compromised and then likely sold for a profit by the hackers.

In SelfKey, your identity instead resides on your own device and is accessed through the SelfKey Wallet, which is non-custodial. Your SelfKey ID is by design not stored on SelfKey servers or on the Blockchain. Therefore, only you control access and permissions to your identity. Using the SelfKey Wallet with a SelfKey ID, you can then use the services on the SelfKey Marketplace as well as the Login with SelfKey (LWS) partners, taking advantage of one-click onboarding. The SelfKey Wallet also stores ether and ERC-20 tokens, and is fully supported by Ledger and Trezor hardware wallets.

Banner with benefits of using SelfKey

The SelfKey Marketplace supports two major use cases: incorporations and bank account opening. Another use case, decentralized finance (DeFi) onboarding, is on the works. The specific details can be found in this article’s ecosystem section.

Tokenomics

$KEY is the utility token of the SelfKey ecosystem. In order to pay for services in the SelfKey marketplace, one needs $KEY.

According to the current roadmap, holders of $KEY will receive $LOCK, a new protocol governance token. Governance tokens give both economic and voting rights, and as such are more akin to stocks of equity in a centralized company than utility tokens. More details under the roadmap section of this article.

$KEY is traded in secondary markets. According to $ KEY data from CoinMarketCap , the token is found with the most volume and liquidity on the following exchanges:

|Exchange|Trading Pairs| |---|---||Binance|KEY/USDT, KEY/ETH| |Hotbit|KEY/ETH, KEY/BTC| |KuCoin|KEY/BTC, KEY/ETH| |Bilaxy|KEY/ETH| |Kyber Network|KEY/ETH|

$KEY is a token issued on the Ethereum network as per the ERC-20 standard, so besides the SelfKey wallet, it can be transferred to any Ethereum wallet that accepts custom contracts like MetaMask, Trust Wallet, Ledger, Pillar, or Portis.

EcosystemDigital key art

The SelfKey ecosystem consists of identity owners, certifiers, and relying parties. The SelfKey Foundation’s role is to strengthen and develop a strong economic system by incentive engineering, integrations, and partnerships. SelfKey also uses KYC-Chain as a native provider of verification.

Official support

SelfKey provides managed onboarding for certifiers (parties like notaries, lawyers, solicitors) and relying parties (consumers of KYC data) to facilitate their participation in the SelfKey’s identity ecosystem.

Developer support

A well-designed and thorough developer resource is available at the SelfKey docs @ selfkeyfoundation.github.io . The docs detail how to integrate and authenticate SelfKey IDs vía a SelfKey wallet and extension integration, or with LWS. Also detailed are integrations with the SelfKey Marketplace.

Partnerships & Community | Governance | Roadmap

Art on proposed $LOCK tokenomics

A major development is being planned as SelfKey works to adapt its ecosystem and solution for a future where DeFi is the mainstay of Crypto. In an adaptation of its tokenomics, SelfKey may launch a new token by the name of LOCK in a fair airdrop or fAirdrop. The fairness, in this case, will be a time-locked staking contract for users of SelfKey (who have an identity in the system) who are also holders of $KEY, the utility token. Community members will have to stake their $KEY to earn $LOCK. The longer $KEY is staked for, the more $LOCK will be accumulated. The rate of accumulation will be in direct relation to the percentage of $KEY being staked in aggregate. To unlock the new $LOCK, the staked $KEY will be burnt.

SelfKey is proposing to use $LOCK to incentivize DeFi use cases related to SelfKey, for example, earning $LOCK by utilizing DeFi platforms through the SelfKey Marketplace, and also as an incentive for becoming liquidity providers (LPs) to SelfKey partners, or becoming LPs for $KEY and $LOCK pairings in selected platforms (incentivized pools). Currently, there is an open consultation on the proposed $LOCK tokenomics for those interested in participating.

In Summary

Insert GIF/meme here — lightweight format pls

SelfKey is amongst the key providers of decentralized identity solutions in the Blockchain space today, with a team that is well-versed in the sector not just for end-users but also for businesses of all sizes. As the Crypto-Verse enters Blockchain 3.0 with the explosion of staking economies, community-governed protocols, and yield farming, SelfKey is making a move to push the vision of self-sovereign identity forward together with the rest of the space.

Excited about SelfKey? Anything this article missed? Reply below to let me know!
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theETHdev

Do I understand correctly, regardless of how much yield you receive or for how long you farm $LOCK during staking, all your $KEY will be burnt once you try to harvest?

Say I stake only for 1 day, and then decide to harvest my $LOCK, all my $KEY will be burnt. This basically means that I won't be able to farm $LOCK anymore.

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attract-KEY

We need the team to post the latest news on Twitter or the CEO tweet

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Giorgia x/alpaca-cityx/axie-infinityx/contributex/dragonereumx/giorgis-testx/holdexx/nervos-network

I really like the idea of opening a bank account overseas with just my #DigitalID. We wouldn't have to wait for the 🏦 services to open country-by-country. Much needed in Hong Kong 🇭🇰.

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George x/holdex

Particularly with #COVID19, I see governments more willing to go the way of #eGovernment and that needs #DID — glad to be in #Blockchain where I can help #buidl 👨🏻‍💻 these solutions

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Vadim x/holdex

Edmund Lowell has been talking about the impact of #DeFi on the rest of #FinTech (#CeDeFI anyone?) so it makes a lot of sense for SelfKey to move in this direction.

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Mihail Ozarinschi x/holdex

I think utility tokens as internal payment tokens are hard to justify in these days of #stablecoins in #Ethereum ($DAI, $USDC, $USDT) but I can see how governance tokens really get the community engaged and provide value, the #fAirdrop is also the right move! 👍🏻

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