A retrospective on a year building a Decentralized Identity network on Cosmos. Co-authored by Ankur Banerjee, Ross Power and Alex Tweeddale.
2022 has been a huge year for the cheqd Product & Engineering team. We’ve made three major software upgrade releases to the cheqd network and several minor upgrades, including:
- 0.4.0 and 0.5.0: Upgrades to the cheqd DIDs, DID Documents and DID Resolution, building on top of the cheqd DID method;
- 0.6.0: The feature addition of DID-Linked Resources which is creating waves in the SSI / #IDTech space;
- 1.0.x: Updated pricing for identity transactions and CHEQ tokenomics v4 (Testnet & Mainnet due to release in Jan 2023).
Each upgrade comes at the end of a development cycle (shown by the spikes on the graph below), contributing towards our mission to build a stable, trusted and secure decentralised identity network, known within SSI as a Verifiable Data Registry.
From these releases, here’s a quick overview of what our overall journey looks like so far:
You can think of everything we have been working on to date as:
- Feature parity with all other SSI networks;
- Identity functionality that goes beyond existing SSI networks; and
- The tooling and scaffolding to lay the foundations for payment rails for Verifiable Credentials.
Bringing this all together into a visual representation, using the Trust Over IP stack as we have done in the past, helps to make sense of what cheqd’s capabilities look like both now and what’s to come…
Our top product takeaways
Before diving into how we measured up against our 2022 roadmap, we wanted to lay out five key product takeaways from this year.
1. SDKs are a crucial product driver to adoption
To get cheqd integrated into our partners’ software applications, we must focus on supporting the broadest range of SDKs, across Hyperledger Aries and non-Aries spheres. Until functionality is supported fully in an SDK, the fact that it is supported on the cheqd network is less relevant.
That said, we also want to be honest with ourselves and you in some areas. We had hoped to make more progress and have a larger suite of SDK support this year. However, the complexity of SDKs and the effort we put into building other first-of-a-kind aspects of our ledger, such as a Resource module has slowed this progress down. Aries SDKs are largely a community challenge. With each SDK so tightly bedded to Hyperledger Indy, it’s taking a mammoth effort from the whole AnonCreds community to rework this into a Ledger-agnostic AnonCredss specification.
2. Payment rails are worth the cost / benefit analysis
Mass adoption for cheqd is predicated on the success of the payment rails. Earlier in the year, we conducted a survey and gathered that payment rails would swing partners to invest the time and resources to fully integrate with cheqd because they would offer a new angle and incentive for clients and customers to bite on SSI technology.
Data showing how payment rails will help cheqd’s partners gain adoption
While admittedly, we didn’t make the progress into payment rails that we set out at the beginning of the year, we have laid the groundwork in terms of identity functionality, partnerships and interoperability for payments to feature centre stage in 2023.
3. Interoperability is a USP
In terms of identity on-ledger, we generally feel a great sense of accomplishment with our progress. Being able to bridge the AnonCreds crowd with the VC-JWT and VC-DI (JSON-LD) proponents using innovative and highly requested standards will help cheqd establish itself as a respected alternative to other leading identity networks such as Sovrin and ION.
We are also leading the charge to broaden Hyperledger Aries SDKs’ dependencies and innate ties to Hyperledger Indy. We joked about the interoperability pitfalls of Aries at the start of the year in our presentation on the Seven Deadly Sins of Commercialising SSI, and now meaningful interop changes are finally coming to fruition.
4. Never underestimate the difficulty of refactoring to support upstream changes
The Cosmos-wide Dragonberry vulnerability and patch (see 0.6.9) was a big shakeup in the Cosmos SDK ecosystem. As a result of the vulnerability, there have since been widely coordinated sets of changes for securitys reasons across the Cosmos ecosystem.
In just two months there have been six Cosmos SDK bumps addressing security issues. In two of these releases (0.46.5 and 0.46.7) prior versions of Cosmos SDK were retracted for security reasons, meaning that expedited shifts to the latest SDK versions was a priority.
Additionally, software for decentralised identity gets developed very rapidly and requires fast catchup to upstream projects/codebases. For example, our Veramo SDK for cheqd requires changes to be made when there are upstream changes in the Veramo SDK versions.
What that means for us is a lot of developer resources need to be dedicated to keeping up with the quick succession of upstream releases upstream which has inevitably taken away focussed time on cheqd specific product features.
5. Demos speak louder than words (and code…)
Getting a general audience and Web3 audiences to understand the value of decentralized identity can be challenging. Blogs, docs and written information are often difficult to consume for newcomers unfamiliar with our terminology. For this reason it is important that we focus on demonstrating the value of cheqd’s identity technology, rather than simply explaining it.
This year we’ve created two initial demos of how credentials may work in real world scenarios. Firstly, we partnered with Animo Solutions to demo AnonCreds on cheqd being issued and used in various scenarios. This went down very well with identity audiences, but again, newcomers and Web3 companies struggled to understand why AnonCreds were cool!
Secondly, we created a cheqd wallet demo which shows how Verifiable Credentials can be stored and used alongside your crypto. In this demo, we enable a user to get a social media credential for authenticating with Twitter or Discord, then upload a QR code of a ticket for an event, and present a combined presentation of their social media credential and the event credential.
This demonstrates how credentials can be used to prove a level of trust and reputation in someone’s identity and also their validity for entering an event, a topic we’ve since expanded on. Demos like this go a long way to showing people the power of the identity technology we’ve built, and we want to go even further with simple, gamified demonstrations of the tech in 2023.
Looking back on our 2022 Product Vision
We strongly believe that transparency in our product development is integral to the success of cheqd. As such, we want to take a candid look at how we have measured against our initial goals set at the beginning of 2022. We hope that you, our partners and community members, also continually challenge and hold us to account.
Looking back to the start of the year, our three focus areas for development laid out in our January Product Vision blog were broken down into:
- Identity: Core identity functionality for our partners to build compelling self-sovereign identity use-cases on top of the cheqd network.
- Web 3.0 Core: Core Web 3.0 functionality adds deeper integration for our network and token into the Cosmos and other blockchain ecosystems.
- Web 3.0 Exploratory: Emerging Web 3.0 use-cases such as decentralised exchanges (DEX) ecosystems; decentralised autonomous organisations (DAOs); identity for non-fungible tokens (NFTs), and in general, DeFi applications.
So, how did we match up against these goals and objectives? We’ll take a look at each Core section and give them a score based on how many goals we successfully achieved.
- TOTAL SCORE: 5/6
1. Tutorials for developers
Tutorials are critical for having actual utility built on the network, since if users don’t know how to use what we’ve built, there is little value in it. We have been hard at work on expanding our documentation for developers using cheqd’s identity and ledger functionality:
To utilise the Veramo SDK for cheqd, you can follow the setup guide here. You can then follow our tutorials to begin creating DIDs and DID-Linked Resources on cheqd, or create Verifiable Credentials and Presentations.
2. Integrations with industry-standard identity projects
We set out at the beginning of 2022 to integrate cheqd into the DIF Universal Resolver. The Universal Resolver utilises REST APIs and other interfaces to enable the resolution of any DIDs which have a supported driver. We have successfully made this integration and you can now find did:cheqd on the list of supported drivers. Over 2023, we will improve and refactor our DID Resolver and our integration to make it fully enterprise-ready.
The graph below shows our work on the cheqd DID Resolver and how the bulk of the work was carried out towards within the second and third quarter.
We have also made significant progress to integrate cheqd into the DIF Universal Registrar. This will enable parties to create, update and deactivate cheqd DIDs through a standard interface. The Universal Registrar can also be leveraged to support cheqd in a wider range of applications and SDKs. You can cheq out our progress in our Open Source repository here.
3. New & Improved Identity Functionality
We have gone above and beyond other identity networks on the market. Firstly, looking at the cheqd DID method, we have incorporated the ability to have multiple DID controllers and to have more complex verification method relationships not present in the did:indy method.
We have also published implementation reports for our DID method, DID resolver and DID URL dereferencer against the DID Core Specification Test Suite to transparently show our DID method capabilities.
Most notably, we have built a ‘resource’ module which supports DID-Linked Resources identifiable with unique, DID Core conformant, DID URLs. This functionality is available to begin using through the Veramo SDK for cheqd. You can learn more about DID-Linked Resources in our guide here.
Using DID-Linked Resources, we have been able to natively support AnonCreds on cheqd, a type of credential format used by Hyperledger Indy and Hyperledger Aries libraries which has increased privacy-preserving qualities compared to VC-JWT and VC-DI (JSON-LD) based credentials.
You can see how cheqd benchmarks against Hyperledger Indy in a side-by-side comparison here.
4. Payment rails for identity
Payment rails for identity has been cheqd’s flagship offering since the network was launched. In the last year we have laid the groundwork and foundations for payment rails to layer on top.
In our update 1.0.x we are introducing new tokenomics for the network which will tie the CHEQ token to the core identity utility on the network. You can see cheqd’s updated pricing and comparison against Sovrin and Indicio here.
This is the first step towards payment rails, and early in 2023 we hope to release a phased architectural plan for achieving full payment rail functionality.
5. Client SDKs in more programming languages
In terms of our product development on the cheqd SDK, below you can see the commits over the year for the cheqd SDK and cheqd Veramo plugin.
6. Better interoperability and support for emerging identity standards:
cheqd has made a splash in the identity world with heavy influence into two emerging technical standards. Firstly, a W3C specification for DID-Linked Resources, as an extension to the DID Resolution Specification. Secondly, an updated ledger-agnostic Hyperledger AnonCreds specification that will complement cheqd’s approach to supporting AnonCreds object using its DID-Linked Resources.
Through supporting AnonCreds on cheqd, cheqd is the first network to support all major credential types, with VC-JWT fully supported and VC-DI (JSON-LD) at the final stages of being production ready.
Web 3.0 retrospective
- TOTAL SCORE: 3/6
1. Wider integration with Cosmos ecosystem
We have expanded the number of platforms that cheqd functionality is available on. For example, at the beginning of 2022, staking and governance functionality was only available through with our friends at OmniFlix on our web-based cheqd x OmniFlix dashboard.
Now, we natively support staking and governance in our own cheqd wallet web-app and separately support governance operations at our cheqd x Commonwealth forum.
Notably, cheqd is also fully supported by Leap Wallet on their browser extension and on their mobile app. The beta Leapboard enables you to manage your CHEQ alongside your other Cosmos-based tokens in one place.
Going forward into 2023, we still want to push for full Keplr integration, and importantly, we want to introduce the ability to manage Verifiable Credentials within existing Cosmos-based applications.
2. Bridge to Ethereum networks
In Q1 2022, we successfully set up a bridge to Ethereum for the cheqd network using the Gravity Bridge. A blockchain bridge or ‘cross-chain bridge’ enables users to transfer assets or any form of data seamlessly from one entirely separate protocol or ecosystem to another (i.e. Solana to Ethereum, or in our case Cosmos to Ethereum and vice versa). The ERC20 version of CHEQ, the CHEQ-ERC20 wrapped token can be found here!
Read more about the cheqd x Gravity bridge and our decisions around it here.
3. Improved automation and tooling
We have made significant progress in how we have architected our cheqd node tooling and infrastructure. At the beginning of 2022, for example, it was a manual process to upgrade your cheqd node from scratch. We have since introduced an interactive installer which automates the process of upgrading cheqd nodes, making it significantly easier and less time consuming to run a cheqd node.
In addition, we have introduced several new components to streamline the setup and management of nodes in the form of infrastructure-as-code. We have started using HashiCorp’s Terraform to define consistent and automated workflows. This automation gives prospective network Validators the choice of whether they want to just install a validator node (using our install instructions), or whether they want to set up a sentry-plus-validator architecture for more security.
To complement Terraform, we have also introduced Terragrunt which performs the role of a wrapper to make our infrastructure available in Hetzner and DigitalOcean, as well as making it easier to utilise with AWS or Azure.
And to make cheqd configurations reusable across other Cosmos networks, we have begun using Ansible, which again acts as a wrapper or envelope to take cheqd configurations between separate Cosmos projects for node operators.
For a condensed list of the tooling and automation improvements we have made during the year, take a look through our Open Source-a-thon blog.
4. Native, cross-chain privatives for the Cosmos ecosystem
Our demo wallet showcases how cheqd DIDs and DID-Linked Resources can sign and be wrapped into Verifiable Credentials in Cosmos-based identity wallets. Using the demo wallet, you can now obtain credentials for authenticating with a social media profile, as well as for importing event tickets which you can combine into one proof. Within these Credentials, there are schemas and images which are stored as resources on the cheqd network. You can watch a video of the full demo here.
This is a huge step for demonstrating how cheqd’s identity functionality can begin to slot into other Cosmos-based applications. A priority for 2023 will be exploring how cheqd’s identity primitives can be utilised across other Cosmos chains, perhaps through opening up cheqd’s DID and Resource module to the rest of the Cosmos ecosystem via Interchain Accounts.
5. Smart contracts using CosmWasm
Using smart contracts and CosmWasm will likely be a crucial component of creating a privacy-preserving payment flow for credentials on cheqd. We are waiting until the first iteration of payments on cheqd has gone live before looking to integrate smart contracts. This is because CosmWasm will largely increase the computation cost for running a cheqd node. Therefore, we want to make sure the addition of CosmWasm does not get introduced before it is ready to be used.
6. Establish ourselves as a leader in decentralised governance for identity
cheqd’s Governance Framework is poised to become the first fully Trust over IP conformant Layer 1 Governance Framework. This will be enabled through cheqd’s approach to DID-Linked Resources which will identify the Governance Framework with a unique DID URL.
The cheqd governance framework also tightly aligns itself with the latest Governance standards coming out of the ISO/TC 307 technical committees on Governance (ISO/TS 23635:2022) where the concept that cheqd refers to as “Entropy” was a core component of the ISO approach to blockchain governance.
cheqd’s Governance Framework has since been lauded by leaders in the decentralised identity space. Drummond Reed, Director of Trust Services at Gen and co-author of the DID Core Spec stated:
We’ll also be continuing to engage with working groups, consortium and organisations in the SSI space, such as Decentralized Identity Foundation (DIF), Trust over IP (ToIP), World Wide Web Consortium Credentials Community Group (CCG), European Blockchain Services Infrastructure (EBSI), and LACCHAIN to align on best practices and standards for governance and identity technology.
In 2022 we have made huge amounts of progress in terms of product development across the board, completing 8/12 objectives we set at the beginning of the year. Our development cadence and quantity of work is also illustrated by the sheer volume of commits (5,365), pull requests (262) and frequency of PRs (1.3 per day) that we’ve achieved this year, shown in the overview below (this is just based off of 2 of our repositories (cheqd/cheqd-node and cheqd/sdk).
Overview of cheqd’s development metrics
Putting this into perspective, cheqd ranks at the top of all the Cosmos-based chains for total commits for the month of December (as of 22/12/2022) with 874, and this wasn’t even our month with the highest number of commits (we reached 1,175 in November).
Graphic showing monthly commits of Cosmos chains
This is a huge testament to the dev and dev ops teams who have worked around the clock to bring our product visions to life, and we’d be nowhere without them!
In summary, 2022 was the year of building solid foundations, and this can often go under the radar. 2023 will be the year of functional applications, utility and deployments on cheqd.
In fact, we intend to start the year with a bang (hint hint you may have heard of a project with the codename Boots.)
Ankur, Ross and Alex