ERC-725 and ERC-735: What are they? New identity standards
Hello everyone!
ERC-725 and ERC-735 are two important standards on the Ethereum blockchain, aiming to standardize the identity verification process. This article will discuss the unique features of ERC-725 and ERC-735 standards, bringing convenience to the implementation of identity verification processes on the Ethereum platform.
Let’s learn right away! I’m Neo — Admin — Community Manager of Optimus Finance and Growth Marketing of LECLE Vietnam.
1. What are ERC-725 and ERC-735?
ERC-725, created by Fabian Vogelsteller, is a significant standard on the Ethereum blockchain used for issuing and managing identities through smart contracts. This identity represents an individual or a group and holds keys for actions such as transactions, logins, and access permissions. It also verifies ownership rights through third-party authentication (issuer) and self-verification via ERC-735.
ERC-735, an extended standard of ERC-725, is used to expand and adjust the attributes of each identity on the Ethereum blockchain.
The strong connection between ERC-725 and ERC-735 provides a standardized means to manage and verify identity on Ethereum blockchain. Below is a diagram representing the relationship between ERC-725 and ERC-735 to help you better understand them.
In general, ERC-725 and ERC-735 play a crucial role in building a safer and more reliable digital environment. They provide an effective standard for managing and verifying identity, opening up numerous potential applications and benefits in the future. The combination of these two standards marks a significant step in creating a trustworthy and secure blockchain system for the user community.
2. Who is Fabian Vogelsteller?
At present, he has ceased working for Ethereum and become the founder of the LUKSO project — a Layer 1 blockchain. However, unlike his achievements during his time at Ethereum, Fabian Vogelsteller has not yet achieved similar success with the LUKSO project.
Fabian Vogelsteller, a renowned developer, has made significant contributions to defining the ‘ecosystem’ in the crypto market. He is the author of important projects such as:
- ERC-20: The most popular token standard on Ethereum, used for many well-known tokens such as UNI, 1INCH.
- Web3.js: A toolkit supporting developers in easy interaction with Ethereum platform.
- Mist Browser: The first browser that directly connects users to blockchain.
At present, he has departed from Ethereum to become the founder of the LUKSO project — a Layer 1 blockchain. However, at LUKSO, he has not achieved the same level of success as during his time at Ethereum.
3. The applications of ERC-725 and ERC-735
ERC-725 and ERC-735 have been developed to address a common issue within the user community, which is the lack of ownership of personal information. In traditional systems, this information is often stored on centralized servers, increasing the risk of exploitation by hackers to steal critical information such as bank account numbers and passwords.
Storing data in a decentralized manner on the blockchain is an excellent solution to tackle this problem. ERC-725 and ERC-735 have standardized the way user identities are managed on Ethereum blockchain. Below are some useful applications that both standards bring:
3.1. Decentralized applications (DApps)
Many DApps require users to have a unique and verifiable identity to experience the application. ERC-725 and ERC-735 provide a solution for DApp developers to create and manage identities within their applications. This not only enhances user-friendliness and security but also introduces new concepts in the DeFi market, such as unsecured lending, allowing users to borrow without using collateral.
3.2. NFT 2.0
The ERC-725 standard facilitates easier interaction between Smart Contracts and NFTs. ERC-725 has two sub-standards, namely ERC-725X and ERC-725Y. An interesting aspect is that incorporating ERC-725Y into standards used for NFTs, such as ERC-721, helps create a new, more complex, and intriguing version than the current one. This is because the ability to add or remove claims from ERC-725 allows NFTs to attach additional value, enhancing their interactive capabilities.
3.3. Providing a smoother user experience
Now, storing the Private Key every time a new wallet is created is no longer an issue, thanks to the adoption of the ERC-725 and ERC-735 standards. These standards provide identities for users on the blockchain, eliminating the need to store multiple Private Keys when interacting with DApps on blockchain. This allows users to interact with any application on blockchain without having to create multiple accounts on different wallets, increasing convenience and flexibility.
3.4. Applications in the real world
ERC-725 and ERC-735 standards can be flexibly used for a variety of purposes in the real world. For instance, they can be applied to create personal documents for refugees or individuals living in countries with weak identification systems. Additionally, they can be used to manage land usage rights in some countries, opening up the potential for widespread application in improving information management and verification processes in various fields.
4. Advantages and Disadvantages of ERC-725 and ERC-735
4.1. Advantages
Here are the notable advantages of the ERC-725 and ERC-735 standards:
- Developer-Friendly: According to Fabian Vogelsteller, these standards are designed to meet two crucial factors: conciseness and developer-friendliness. As a result, the source code of ERC-725 and ERC-735 is written concisely and simply, making it easy for developers to implement and integrate into their applications.
- Flexible integration with various token standards: According to Fabian Vogelsteller, both standards, ERC-725 and ERC-735, can easily integrate with different types of standards to enhance security and usability. Standards like ERC-780, 3BOX can be combined with ERC-725 to extend the capabilities and flexibility of the system. (Currently, there is no specific information about compatible standards for ERC-735).
- Managing multiple accounts simultaneously: ERC-725 and ERC-735 enable users to integrate multiple wallet addresses within a Smart contract, providing management and login rights for multiple accounts with just one Private Key. This brings convenience and flexibility to account management and interactions on blockchain.
4.2. Disadvantages
- Security concerns are not fully addressed: Although ERC-725 and ERC-735 are developed to tackle anonymity issues through claims such as biometrics and national identification cards, there is still a risk of fraudulent measures like fake emails or forged ID cards. Therefore, it can be said that ERC-725 and ERC-735 have not achieved a high level of security regarding anonymity issues.
- Dependency on third parties: If authentication information from third parties contains errors, users and DApps will be significantly affected. Moreover, there is a risk that third parties may autonomously alter and steal users’ personal information, creating a vulnerability in the system.
5. The Potential and Applications of ERC-725 & ERC-735
5.1. Enhancing credibility for identity
ERC-725 and ERC-735 contribute to enhancing the value of identity in DeFi market. For instance, users can add elements such as avatars, personal information, introductions, similar to platforms like X (Twitter) or LinkedIn. This helps DApps, especially those related to Lending/Borrowing, identify real users and create transparency in the use of their products.
Furthermore, ERC-735 allows users to flexibly add or remove claims on their identity, enhancing user autonomy in identity and minimizing the risk of security information disclosure.
5.2. Reducing the Frequency of Bots
Bot is a program designed to automate transactions, aiming for profit for developers. Currently, bots are becoming a tool for quick profit and are widely trusted by many investors.
However, the prevalence of bots also means that they cause many unwanted issues in the crypto market. For instance, in a public NFT mint event with 2,000 slots for the community, usually only a few hundred or a few dozen actual users have the opportunity to buy, as the majority are bought up by bots due to their fast transaction speed.
This issue creates inconveniences for genuine users, making it difficult for them to profit in the crypto market. Therefore, ERC-725/ERC-735 can play a role in addressing this problem by verifying the identity of genuine users, thereby reducing the frequency of bot appearances in the crypto market.
6. The future of ERC-725 and ERC-735
Similar to the increasing acceptance of DeFi by a wide range of users and the goal of mass adoption, the primary objective of ERC-725 and ERC-735 is widespread application in the community.
A specific example could be in managing access rights to an apartment building. Instead of needing a physical card or contacting someone for access, users can use ERC-735 to add access permissions.
This application brings several benefits, including:
- Convenience for residents: No need to carry a physical card; residents can grant access remotely.
- Recording and accessing data: In case of incidents, all transactions are recorded on the blockchain, aiding in identifying responsibilities and resolving issues.
- Potential for storing personal information: In the future, information such as national ID, medical records may be stored on the blockchain, with ERC-725 and ERC-735 playing a crucial role.
However, it is important to note that both standards are proposals from Fabian Vogelsteller and have not been widely implemented by DApps, as practical application is still in the development stage.
7. Closing thoughts
ERC-725 and ERC-735 standards have been in existence for a while but have not gained widespread adoption in crypto market. One reason for this is the current infrastructure, which is not yet conducive to developing identity-focused applications, although they open up new potentials in DeFi space, such as unsecured lending and various other applications.
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