Fractal: Digital identity for the Web 3.0

Identity and personal data will be crucial aspects for interacting in the decentralized web, also in the energy space.

Carolina Soto
Feb 11 · 5 min read

At the innogy InnoHub we envision a decentralized and fully automated energy system, where not only people but also machines (renewable energy resources: solar plants, wind parks, IoT devices) will generate, aggregate and trade energy autonomously between each other to balance the grid. Flexibility, in terms of electricity and load balancing, will become a new asset in the energy system.

This means, among other things, that we need much more transparency regarding the new market participants; a shared registry of who is who in the system (e.g. autonomous EV talking to its owner or a charging pole to trade energy) is vital for enabling communication in the decentralized web.

In this post we will explore the role of identity as the gateway to the decentralized web. We will have Julian Leitloff from Fractal answering how his ID solution is doing just that.

[Disclaimer: we are investors in Fractal Blockchain]

Let’s get started.

Can you give us a brief pitch? What is Fractal doing?

Fractal ID is a KYC/AML onboarding solution with a focus on usability and compliance. We aim to make it easy for customers to register and have created a smooth process that works internationally. Fractal is easy to integrate and even serves obligated entities like exchanges and banks. We are native in the Web 3.0, so we are quite excited to issue decentralized IDs (DIDs) that work on-chain.

What on earth is the web 3.0 and why do you need an identity for interacting with it?

Definitions of web 3.0 vary but it will feature more autonomous interactions taking place between machines as well as more decentralized technologies, such as the blockchain ecosystem. In this environment, identity becomes very important; for example, a lending protocol might need identity verification to decrease fraud. On a data protocol, sensitive information like health data might only be shared if the identity of the buyer is known. When facilitating car sharing, it might come in handy to know that the driver has a license. In this process we don’t operate our own DID, but rather look at existing technologies, like Sovrin, Fabian Vogelsteller’s ERC 725 standard or the upcoming Kilt protocol.

Who is Fractal ID for?

Photo by rawpixel on Unsplash

Fractal ID works well for obligated entities that see a lot of international customers, like cryptocurrency exchanges, wallet providers and trading platforms. We also work with FinTechs like crowd-lending or real-estate platforms. It is surprising, but even regular banks are quite interested in digital onboarding processes. But there are several other use cases as well. For example, the 5th Anti-Money-Laundering directive now requires lawyers, tax consultants and art dealers to identify their customers.

You will need identity when selling age-restricted products like cigarettes online or might want your customers to identify themselves to make the service more secure. That is especially true for the sharing economy, like car or house rentals.

Imagine I’m a certified investor but one day I decide to finance terrorism. Would my identity claims be revoked? How can you ensure that a user’s identity is always up-to-date?

People onboarding the platform are checked against over 85 different databases including lists provided by law enforcement agencies like Interpol and other government agencies. Once a name shows up on a list, the person is being checked. In most cases however, people just happen to share the same name. Investigating these people manually is a lot of work, but necessary to avoid rejecting the 90% legitimate customers or admitting the criminals.

Getting your customers to update their information is always a hassle. We try to do that in the least intrusive way possible and try to nudge people to keeping their information up to date. However, we have a big advantage, because with Fractal, the customer just has to do it once rather than having to update every service he or she uses that needs it.

You are handling lots of personal data from people all over the world, how can you ensure compliance with GDPR and other data protection laws?

The basis of GDPR is actually simple and awesome for the user. You need to give people the right to know in advance what you are going to do with their data and get approval for that. This should be common practice. But as we have learned, it was actually common practice for the big digital corporate to sell personal data without individual’s consent or even their knowledge. We always ask for consent; that is built into the open authentication process.

The second basis is the right to have an overview of all the data that is stored and have it deleted. By default we display all the data that we have and we give users the right to delete it.

What if a person from China who doesn’t speak any German wants to use fintech services in Germany. Could the Fractal ID help?

Photo by Nathaniel Shuman on Unsplash

Absolutely. Our service is built for an international audience. As a matter of fact we just implemented a simplified Chinese version of the software.

However, there is more to it than that. The vendor checking the documents needs to be able to understand it and may even have to respond in the language for it to be understandable.

You compare the Fractal ID to the Facebook login button in terms of convenience (great!). How fast do you see ordinary people (no expertise on blockchain whatsoever) logging in with their Fractal ID to use e.g. Airbnb?

Ordinary folks don’t care about the technology, they care about the product. Our target customer is always the mainstream user.

Let’s face it, even pro users appreciate an easy navigation and a great interface. I would argue that we already have ordinary customers using Fractal ID to onboard.

Where do you see Fractal in five years?

I hope in five years we are part of a vibrant identity ecosystem that is being used for open finance application but also a thriving protocol economy.

📥 Want to get in touch with Fractal? Contact Deborah Zilian at and

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💡If you’re interested in hearing more about our Machine Ecomomy thesis at innogy Innovation Hub contact

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innogy Innovation Hub

The innogy Innovation Hub drives game-changing ideas that can revolutionise an existing business model or industry permanently. We are actively looking to invest in start-ups that have already demonstrated their value in the market and have the potential for exponential growth.

Carolina Soto

Written by

Innovation scout & Portfolio Manager @ innogy Innovation Hub

innogy Innovation Hub

The innogy Innovation Hub drives game-changing ideas that can revolutionise an existing business model or industry permanently. We are actively looking to invest in start-ups that have already demonstrated their value in the market and have the potential for exponential growth.

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