cheqd Foundation Delegation Programme 2023

cheqd Treasury Delegation Programme

cheqd Foundation Delegation Programme 2023


GM cheqmates 👋 Since the turn of the year, we’re beginning to see the cheqd ecosystem flourish: our ecosystem partners are beginning to integrate our tools, clients are kickstarting Trusted Data markets, and we’re all getting our boots fitted!

To continue building momentum and encourage further innovation on top of cheqd, we are announcing our cheqd Foundation Delegation programme. This programme is intended to:

  1. Reward Validators that build with and alongside cheqd, incentivising innovation and collaboration;
  2. Develop closer relationships between our Validator ecosystem and the cheqd Delegator community;
  3. Increase network decentralisation and Entropy in line with our Governance Framework;
  4. Bolster the health and security of the cheqd Validator set with greater incentives for node maintenance, engagement and expansion.

By rewarding contributors to the cheqd network and good network maintenance, the purpose is to create a virtuous cycle, where constructive participation in the network leads to higher rewards, which in turn encourages further participation.


We are setting aside a Delegation Pool of up to 150 million CHEQ tokens which may be delegated to Validators that help positively contribute to the cheqd ecosystem.

The range of delegation per Validator is expected to be between four million and 40 million CHEQ based on the eligibility and criteria set out below.

By introducing tokens from the cheqd treasury into the active pool through delegations, this may also, over time, increase the percentage of “bonded” tokens above the “Goal Bonded” of 60%. This would begin to reduce inflation, similar to what is currently occurring with the Cosmos Hub. Currently, it would be very difficult for the community to achieve the “Goal Bonded” given the amount of tokens held by the treasury and not delegated into the active pool. Therefore, we see this as an opportunity for the cheqd community to have more determination over the network inflation tokenomics, specifically with regards to the headline inflation rate (currently at 4%).


All entities are eligible to apply aside from those from sanctioned countries (North Korea, Iran, Syria, Zimbabwe, Belarus, Myanmar, Russia, Sudan, Venezuela, Cuba, Libya, Yemen, Somalia).

Validators who have already received a cheqd Treasury delegation are still eligible, and applications would be reviewed as an increase from their existing Treasury Delegation.

Any validator in receipt of a Treasury Delegation who is either slashed or tombstoned will likely cease to be eligible for the Delegation, which will be removed unless sufficient justification/explanation is provided.


To be considered for the cheqd delegation programme, Validators must actively contribute to the growth of the cheqd ecosystem. Contributions can be made in at least one of the following areas:


  1. Contributions to cheqd’s identity functionality: Validators who have contributed to cheqd’s existing identity functionality, such as SDKs, DID method, DID resolver, DID-Linked Resources, are given preference in the delegation programme.
  2. Building on top of cheqd’s identity functionality: Validators who have built applications or services that complement cheqd’s identity functionality, such as wallets and credential storage.
  3. Use of cheqd’s identity functionality: Validators who use cheqd’s identity functionality in their operations, such as utilising cheqd’s SDKs for Verifiable Credentials or Use of cheqd’s identity functionality also burns $CHEQ tokens from supply and, therefore may be prioritised.
  4. Contributions or support with cheqd infrastructure: Validators who have supported or contributed to cheqd’s infrastructure, such as IBC relays, network indexing/explorer services, integrations into Dapps, UI or other Web3 or Cosmos functionality.


  1. Supporting other validators: Validators who support other validators by sharing knowledge, providing technical assistance, and collaborating on community initiatives.
  2. Creating educational content: Validators who create educational content, such as tutorials, guides, and video content, help to onboard new users to the cheqd ecosystem and promote its use and adoption.
  3. Building community: Validators who work to build community by organising events, hosting meetups, and fostering discussion and collaboration among users and validators.
  4. Onboarding delegators: Validators who actively work to onboard new delegators to the cheqd ecosystem help to grow and strengthen the network.
  5. Community Governance: Validators who have contributed to projects selected by a community vote or community pool spend are also given preference in the cheqd delegation programme
  6. Other initiatives: Validators who engage in other initiatives that help grow and engage the cheqd community, such as participating in hackathons, creating new tools and resources, and collaborating with other blockchain projects, are highly valued in the cheqd delegation programme. These initiatives demonstrate a commitment to the growth and sustainability of the cheqd ecosystem and help to position the network for long-term success.


  1. History of participation: Validators who have a history of participating in both the cheqd mainnet and testnet are given preference in the delegation programme. This demonstrates a commitment to the network and a track record of supporting the ecosystem.
  2. Governance participation: Validators who have a record of governance participation, such as voting on proposals and engaging in discussions about network upgrades and improvements, are also given preference in the delegation programme. This demonstrates a willingness to engage in the governance process and contribute to the decision-making that shapes the network’s future.
  3. Communication and transparency: Validators who prioritise communication and transparency with their delegators are highly valued in the delegation programme. This includes providing regular updates about network performance, sharing technical details about the node’s operation, and being responsive to questions and concerns from delegators.
  4. Jailed Validators: If a Validator has been jailed, meaning they have not been able to validate on cheqd due to financial reasons or otherwise, they may still be considered for delegation. However, they must demonstrate a commitment to maintaining the health of their node, even if they are not able to actively participate in validation. This could include keeping the software up-to-date, monitoring the node’s health, and taking steps to address any issues that arise.


  1. Validators with a strong uptime record, which avoid slashing events, and run up-to-date software on cheqd.
  2. Validators with a strong record of running Validators across other top networks with healthy maintenance and uptime.
  3. Of course, any Validator that can provide Creds attesting to this will be viewed more favourably!

Duration & process

The delegation programme will be in effect for an entire year from the date of the blog’s publication. During this time, eligible Validators can apply for a delegation from the pool of 150 million CHEQ tokens.

The application window will be open for a full two months, giving Validators ample time to submit their applications for consideration.

Two months before the programme is set to end, another application process will be opened for the subsequent year. This provides a clear timeline for Validators to apply for delegation and allows for a smooth transition between programme years. It also ensures that the delegation pool is being allocated efficiently and effectively to support the growth and development of the cheqd ecosystem over the long term.

The delegation process will begin as soon as the first applications are received and reviewed. However, it is important to note that delegations at the beginning of the programme, especially within the first month, may not be the final amount awarded.

If there are not enough eligible applications, or the quality of the applications is not sufficient, the application window may be extended for a certain period, possibly up to the duration of the programme. This ensures that the delegation pool is allocated to the most qualified and deserving Validators who will contribute to the growth and development of the cheqd ecosystem. It is recommended that Validators apply as early as possible to increase their chances of receiving a delegation, but they should also ensure that their application is of high quality and meets the eligibility criteria.

Key Dates + Timelines

  • May 30 — application opens
  • July 30 — application deadline for Cycle 1 delegations
  • June — August — selected validator participants will be notified


To apply for the Delegation programme, you will need to fill out the application form below:

🟢 Click this link to access the application form.

Reimagining Banking with Reusable KYC

Reimagining Banking with Reusable KYC Thanks to Decentralised Identity


Self-sovereign identity (SSI) or decentralised identity (DID) enables both KYC and separately creditworthiness in an efficient manner and in a way that prevents fraud. The verifier of data can always verify credentials directly with the issuer of it. Furthermore, the KYC credentials can be re-used to further save on costs and time while improving the user experience. In short, SSI can significantly reduce the friction for users improving a customer experience and, at the same time, providing a compliant service. While current KYC is “single-use”, SSI makes KYC “reusable”.

Here’s how.

Why current know your customers processes don’t work

Most financial services usually request user identity verification, such as opening a bank account. KYC is the process of verifying the identity of a customer, without it, fraud is impossible to prevent.

Driven by regulatory requirements, banks and corporates are required to undertake KYC and anti-money laundering (AML) checks to be in compliance with them.

While effective KYC processes are vital for successful compliance and risk management, endless identity checks are, at the same time, a hurdle for customers. According to SWIFT, AML and KYC, compliance is growing in importance as more stringent regulatory requirements are coming into force, making it even more difficult for banks to navigate the balance of compliance and frictionless customer service. That balance is being exacerbated by the old-fashioned compliance methods currently used.

Banks, including neobanks, continue to fight a losing battle with fraud in their industry. It is indeed a “losing battle” because they continue to use the same age-old AML and KYC processes to defeat the ever-evolving digital threats. Oversharing personal information in order to verify the identity (i.e. showing a utility bill in order to prove an address) or storing all personal data in a centralised database aren’t future-proof and secure KYC methods.

A very well-known example was the neobank darling Monzo – nearly half a million of their customers fell victim to a data breach. It shows how even digitally-savvy banks’ KYC and data handling methods aren’t sustainable and fit for the digital age.

Part of the problem is the current regulations – meaning these financial institutions are burdened with heavy requirements to be compliant with, which means significant costs. There is no incentive, time or resources for a company within the financial sector to develop an identity solution of its own. Also, perhaps a deeper point could be that they don’t feel it is their responsibility to find a solution. Since the amount of regulation imposed, one may assume that the regulators must know what they are doing and should be the ones to carry this burden. If a bank is already meeting a hefty bill in costs to comply, e.g. paying salaries for a compliance team of 100s of people along with the cost of associated systems, would they be further thinking to find, let alone develop, a solution to the problem?

Yes, one can argue neobanks are much ahead of the rest and are actively using user-friendly identity verification methods, such as selfies, a short video of the applicant or even live verification systems. However, these checks can easily be bypassed with deepfakes, with some of them being literally mind-blowing (cheq out DuckDuckGoose).

Decentralised KYC

In order to understand how decentralised identity can aid the banking sector by re-imagining KYC, we need to understand the core concepts of SSI itself.

Self-sovereign identity or decentralised identity is a method of identity that centres the control of information around the user, hence also sometimes referred to as “self-managed identity”. It safeguards privacy by removing the need to store personal information entirely on a central database and gives individuals greater control over what information they share. Unlike the existing system, it’s a user-centric and user-controlled approach to exchanging authentic and digitally signed information in a much more secure way.

Acting as an enabler of decentralised identity, verifiable credentials are tamper-evident data files with a set of claims about a person, organisation, or thing that can be cryptographically verified.

Banks can adopt a decentralised identity to make their entire KYC process smooth by using reusable verifiable credentials across banks through forming a consortia or potentially utilising initiatives like open-banking here in the UK. If one bank issues a VC, others can simply reuse it and get it verified with the issuer of the VC. The VC can be updated on expiry or on a more regular basis (e.g. annual) based on existing policies of the bank and regulators – and incorporating any further requirements set by the ecosystem or the consortia itself, accommodating various commercial business models – it could be the issuer bank renewing this VC or perhaps the bank that receives a VC which has just expired. The scenarios are endless.

It would lead to saving costs for banks and a massive improvement to the onboarding experience.

Furthermore, banks can start actually becoming issuers of additional, useful data through SSI to their clients, e.g. credit scores, evidence of salary payments or bank balance, bank account title VCs, etc. They can get paid each time another entity (bank or otherwise) needs the VC verified – e.g. a mortgage provider or a new employer, or a visa application. The payer can be verified of the data or the holder of the data. As a result, this will:

  • Make payments fair – e.g. banks get paid because they have actually done something valuable for the client by verifying a particular detail to a third party;
  • Put the data owner in control of their data. The data is issued to the bank’s client, who is the owner and user of that data. And so the user is always in control of where and what data to use.
  • Save time for each participant of the process.
  • Reduce chances of fraudulent transactions or activity, including ID theft.
  • Make all such applications that take hours or days to complete verified in a matter of seconds, including bank accounts, mortgages, visas, loans, property purchases, and so on.
  • Improve security – since the users keep their data, banks do not have to create databases and data silos, meaning they are less of a target for hackers, decreasing their exposure to data leaks and hacks.

Through SSI, banks can further (in a partnership with non-financial and/or government organisations or just within their consortia) create a list of verified issuers of data or even adopt a scale or scoring system. In such a system, the level of trust put in each VC by the user or verifier of that VC is based on several factors, one of which can be the status or credibility of the issuer. An individual can then use those verified credentials to prove their identity. And so, if an individual VC has a lower credibility score due to the VCs issuer, they may need to use multiple VCs from different issuers to prove that particular aspect of their identity.

Companies pioneering decentralised KYC

Decentralised identity is already being used by a number of banks and financial services firms for their KYC. As part of their Regulatory Sandbox, the UK’s Financial Conduct Authority (FCA) tested how decentralised identity can make it easier for customers to sign up for financial products while maintaining a high level of fraud and anti-money laundering protection.

There are also a number of web3 companies already improving KYC processes with the help of decentralised identity. Two particularly interesting ones are Umazi and Verida. Umazi speeds up corporate identity verification by streamlining due diligence by replacing repetitive paperwork heavy processes. Verida is a multi-chain protocol for interoperable database storage and messaging built on decentralised identity.

We at cheqd believe that SSI helps solve this problem effectively. The decentralised nature of the solution makes it resilient to phishing, hacking or similar attacks.

In addition, the identity data is held by individuals themselves. So, there is no single, ripe, fruitful target (a bank in this case) any longer. Even if the perpetrator is successful, there is no longer a single honeypot that stores all that sensitive and very valuable personal data for thousands or millions of individuals.

Finally, cheqd payment rails will create commercial models for trusted data marketplaces, which will incentivise all the participants of the process. And as mentioned above, an organisation that receives identity data or credentials from an individual can have it verified by the issuer of that identity (see the image below), which further helps fight fraud.

cheqd Trust Triangle


In short, while current KYC is “single-use”, SSI makes KYC “reusable”, decentralised, privacy-preserving, cheaper, and future-proof.

The SSI market is around the 0.55 trillion mark, noting this number might be significantly underestimated as other unexplored areas of opportunities present themselves with SSI adoption. Irrespective, experts believe that the adoption of this technology will accelerate in the coming years.

Read more about how cheqd infrastructure enables Trusted Data Markets.