Identity Verification For DAOs — How to Know Your Customer and Protect Yourself While Maintaining User Privacy With Quadrata Digital Identities
With a total market cap of approximately $10.8 billion (at the time of writing), DAOs have established themselves as revolutionary forces in global financial and governing systems. But they still lack a tried & true solution for ensuring a single wallet equals a single vote. Without one, the entire value-proposition of DAOs is fundamentally at stake.
Let’s dive in.
Who’s Really Casting the Votes?
DAOs have captured the attention of far more than your average Web3 enthusiast or Degen NFT creator. Government organizations, businesses, and even prominent politicians have all explored and, in some cases, embraced DAOs and the principles they promote, which is hardly surprising. DAOs democratize the decision-making process so that the balance of power rests in the hands of the community impacted by their outcomes. It makes perfect sense. But unfortunately, at least in Web3, it’s a system with fundamental flaws.
Unlike traditional voting bodies or board directors, DAO members operate free from regulatory oversight. They are not subject to anti-money laundering compliance since they are not recognized as legal entities in most parts of the world. Furthermore, DAO members operate in complete anonymity — all of which is to say DAOs live up to the value proposition of Web3, but it does, however, contribute to a significant downfall.
DAOs rely on majority voting for critical decisions ranging from token distribution, platform modifications, governance rules and much more. But what happens when one or more users take advantage of the anonymous nature of Web3 to create multiple wallet addresses and manipulate votes to serve their best interests?
The average user and community member are no longer part of a DAO. Instead, they’re a victim of a scam.
Transparent and Anonymous DAO Solution: The Power of Quadrata
Identity in Web3 is a sensitive topic. However, there still remains a growing demand to strike a balance between user anonymity and authentication — a pain point Quadrata solves with a 60-second onboarding process.
A Quadrata Digital Identity empowers DAO founders and their members with a pseudonymous method of on-chain verification that upholds the private nature of Web3 while still providing enough information to verify that a single user owns each wallet address. One wallet equals one vote.
Via a non-transferable digital asset bound to the user’s crypto wallet, founders can ensure that votes are cast by a verified person whose private data is stored off-chain with a trusted third party. Founders are also provided with information such as the country where the digital identity was issued and, based on conduct, assign wallet addresses with a behavior/risk score.
With Quadrata, DAO founders can ensure the integrity of their DAO voting process and that the privacy of those casting their votes is upheld.
Building the Web3 Future Where Identity Verification and Anonymity Work Synergistically
DAOs, and Web3 in general, have enabled us to push the limits of our imagination, create lucrative opportunities, and provide a voice for millions worldwide. They have the potential to reshape organizations and governments. But there is still more work to be done to add much-needed stability and transparency — even in an anonymous environment such as Web3.
By leveraging a decentralized identifier like Quadrata DAOs can add an extra layer of trust for their members while ensuring the pillars upon which they’re built on are never compromised.
If you’re ready to build a Web3 future that embodies decentralization and ensures a safer user experience, visit the Quadrata website today to learn more about integrating this revolutionary technology with two simple lines of code.
