What was brilliant about Reddit’s rollout of collectible avatars is that it provided all those who purchase a collectible with an automatic non-custodial wallet to store their collectibles. In other words, instead of pushing self-custody and digital wallets as the selling point for users to jump into the crypto space, they pushed a product first that was already familiar to Reddit users (digital avatars) as the main selling point, and then used the digital wallet as a tool in the background for users to host their avatars. 

We can almost think of this as a clever and positive sleight of hand, where users are given what they want in the short term; digital customizable avatars,  while simultaneously adopting what they actually need long term; full ownership and digital assets and the ability to sell or transfer those assets across platforms if ones chooses. 

The latter description has always been a difficult sell for crypto enthusiasts pitching web3 to a mainstream audience. The reason being is that (to use an analogy) it is hard to appreciate the value of a guaranteed parking spot without first owning a car, or the value of quality kitchenware if one never cooks their own food. 

Simply put, having a certain attachment to an object or activity is the precursor to understanding the value of things that can help protect or enhance that object or activity. 

For many Reddit users, status and reputation within the Reddit community are things that are held in high value. Therefore, anything that provides them with the ability to either protect or enhance their status and reputation will also naturally carry a high value. 

Owning a rare digital collectible is something that is deemed important in the Reddit community. This not only translates to collectibles carrying a high monetary value but also to the need for the owners of these items to feel like they truly own them, which means they cannot be seized by the platform or any other authority. 

This is where the value of blockchains and crypto becomes apparent. Even if the majority of Reddit collectible holders never understand the mechanisms that enable their sovereign ownership of these digital items, the true value is in the ownership and the choices that come with ownership of digital goods, regardless of whether they choose to act on those choices (meaning, as an owner of an avatar, the option to sell or transfer my avatar will always be there regardless of whether I want to sell it or keep it).  This is something social media users have never experienced before. 

What are some ways in which this strategy can be applied to decentralized digital identifiers?  

One of the most commercially appealing use cases for ADIs is the ability to create verifiable credentials for industries where credentials are highly valued yet easily forgeable.

In many ways, post-high-school education is less about learning and more about acquiring credentials from credible institutions that will enable you to stand out from other candidates in the workforce. Many of the top universities in the world make their money not just from providing high-quality education but also from monetizing their reputation as a culturally significant institution of higher learning. A Harvard degree is a stamp of approval that says this person is competent enough to be associated with one of the oldest and most prestigious Universities in the world. The downstream effects of this are the ability for holders of those degrees to command higher salaries and gain access to more exclusive professional networks.

In a world where college degrees are increasingly becoming more commoditized, credentials from credible institutions become more important if one wishes to stand out from the crowd. 

The value of these credentials is not only superficial but can also be critical for leveling the playing field for candidates who are highly skilled but do not live in developed countries and are therefore seen as less valuable. Or in industries like healthcare where professionals are in charge of human life and hospitals and insurance companies need to know that physicians are properly credentialed before treating patients. 

The more important credentials become, and the more they are distributed digitally, the greater incentive there is to commit forgery, and the greater the consequences of forged credentials. 

In this context, ADIs present a natural solution that can cut through all of the marketing buzzwords and misconceptions about blockchain and crypto that obfuscate the value of decentralized digital identifiers.

Now all of a sudden the conversation shifts from ‘blockchain technology’ or ‘decentralized and censorship-resistant protocols’ to simply  ‘verifiable digital credentials’.  

The former is abstract and unrelatable, while the latter is familiar and simple enough for those who value credentials to understand. Even though the former supports the latter, the latter is the only selling point that justifies the target groups’ further understanding of the latter (after all, why else should they care about blockchains unless it serves their immediate needs in ways that other alternatives cannot?). 

This is the important lesson that Reddit likely took from observing the rise of NFTs in 2021, and the negative reaction from the gaming and broader tech community around NFTs. 

Accumulates’ mission is to be the bridge that connects the traditional economy with the web3 ecosystem through decentralized identities. Taking a book out of the Reddit NFT playbook, we’re providing a suite of solutions that strike at the core of what mainstream users value; such as transparent and verifiable credentials, or business-to-business transactions between companies operating in different jurisdictions. 

These are ultimately use cases where ADIs can serve a critical role in enhancing how individuals and entities interact online, without making blockchain technology a necessary part of the messaging to drive user adoption. 

Institutions need to be aware of many things when holding or buying digital assets. There are many working parts including storing private keys and having strict hardware standards for your devices. Additionally, multi-party signatures are necessary when multiple fiduciaries or executors are required for a transaction to be approved. 

Accumulate makes it easy for institutions to integrate or use decentralized finance (DeFi) solutions as the entire network is centered around secure identities and key management. Secure identities have the ability to manage keys, tokens, and data. 

The Benefits of ADIs for DeFi

Accounting for these concerns, Accumulate seeks to integrate secure digital identities into everything – from a publicly-traded corporation to a non-profit organization to a large financial institution.

Accumulate has made identity a central part of its architecture with Accumulate Digital Identifiers (ADI). ADIs are a core component to replicating organizational operations on the Accumulate Network, such as: 

• Making multi-signature decisions 
• Sending & receiving tokens
• Building consensus 
• Key management 

Key Architecture

Accumulate has a hierarchical key management structure where Key Books contain Key Pages, and then the Key Pages contain keys that are authorized to sign transactions. Every Key Page can specify how many transactions are required to approve a signature. 

There is a unique architecture surrounding an ADI’s various functions. Some of the components include: 

• Key Book: Secures accounts and provides advanced key management; belongs to an ADI
• Key Page: Organizes keys within a Key Book

Key Management 

A common use case for Accumulate is making enterprise-level decisions on the blockchain. That means a corporate structure could essentially be replicated – department by department – onto a blockchain network. Accumulate’s unique design is created for this type of corporate replication, centered around the concept of identities. 

Why would an enterprise like a financial institution or a multinational business conglomerate use a blockchain? Blockchains have many benefits that extend well-beyond cryptocurrency and the hyper-financialization of NFTs. 

Benefits of Accumulate’s Unique Identity-Based Architecture 

Added benefits of the unique identity-based architecture of Accumulate enables enterprise data management, business hierarchy, ownership, and regulation-readiness: 

• Enterprise Data Management: Secure data mapping that is highly available and organized. 
• Business Hierarchy: Replicate your business’s operational procedures, but with more permission-based responsibilities like a requirement for multi-signature transactions for decision-making. 
• Ownership: ADIs can be assigned to any asset-owning entity, from buildings and IoT devices to investor reports and patents. Those digitalized, IoT-ready devices then have their own smart identity that is linked to it, ensuring secure communication 
• Regulation Readiness: Accumulate’s architecture is compliance-ready, meaning you won’t have to worry about adhering to the GDPR or other major data mandates because compliance is baked into the Accumulate architecture

Accumulate’s inherent compliance-ready architecture heightens security and market readiness. Additionally, Accumulate is designed to be more approachable for corporations to onboard themselves. 

In Conclusion

Enterprise adoption of blockchain technology continues to grow. Accumulate Network’s compliance-ready architecture can help enterprises take on the unique horizon of challenges. The identity framework and Accumulate’s key management structure delivers a secure, highly modular platform for corporations to integrate blockchain into their tech stack. 

What are ADIs?  

ADIs refer to a system for assigning unique digital identities to assets, individuals, or entities on the blockchain. Traditional blockchains are organized based on randomly generated public and private key pairs which are used to store funds and record transactions on a distributed ledger.  

Current blockchain key management systems lack simplicity for the average user. The common approach of using the first and last characters of an address can leave users exposed to what is called the ‘man-in-the-middle attack’, which is a form of cyber attack where a bad actor could intercept or manipulate a transaction by injecting wrong information or changing the recipient’s address to their own. This is made easier due to the complex nature of randomly generated addresses.

Additionally, due to these addresses being randomly generated, public & private key management systems make it difficult to store ordered data sets or assign different levels of permissions to specific keys.  

Accumulate Digital Identifiers (ADIs) are human-readable addresses similar to website URLs that are chosen by individuals or assigned by organizations to represent their presence on the blockchain. 

ADIs enable more flexibility and deployment of complex operations by issuing a hierarchy of keys with different permissions or levels of security. 

This allows entities operating on the blockchain to more easily build standardized yet scalable protocols for other entities to interact with and exchange sensitive information with them based on access permissions granted for specific data sets.   

Using ADIs, Accumulate can serve as the de-facto communication and audit layer between blockchains, enabling the seamless transfer of tokens or other kinds of digital assets between ADIs across different chains regardless of their consensus mechanism. 

Soul Bound NFTs

While ADIs have the potential to become the primary form of digital identity on-chain, the reality is that digital identifiers are an exploding facet of the crypto space, with several prominent blockchains and Dapps offering some form of digital identity solution for users who wish to create a domain name, build a reputation, and conduct verifications on-chain.

The most popular examples include the Ethereum Name Service (ENS), Civic, Self-key, and Social KYC. 

In the past week, the public interest in digital identifiers ascended to new heights when Ethereum co-founder Vitalik Buterin published a paper titled Decentralized Society: Finding Web3’s Soul. In this 37-page paper, he proposes the idea of creating ‘Soul-bound tokens’ or SBTs, which are a type of NFT that is non-transferrable and also revocable by the owner of the SBT. 

Typically when we talk about a person’s on-chain digital identity, we are usually referring to an NFT that is unique, non-divisible, and cannot be exchanged one-for-one with another NFT. 

The problem with using NFTs in their current state as a form of identity is that their ownership is transferable, which makes their ability to provide a reliable authentication of certain information limited.  

For example, if a University decides to issue degrees in the form of NFTs to graduating students, there is no guarantee that each issued NFT will remain tied to the owner of the wallet that receives it. The owner of the wallet may receive a generous offer from someone to sell their NFT, or they might transfer it to a different wallet or lose access entirely if they are hacked. 

In any of those cases, even if the NFT contains a unique identifier code and metadata, there is no way of verifying that the current owner of the NFT is also the one who minted or originally received it. 

Soul Bound Tokens or SBTs solve this problem by permanently tying a token to the wallet address that receives it, meaning that it cannot be transferred to another address once minted. In the same way that a person and their physical identity (or their ‘soul’) are intrinsically tied together, so is the case with an SBT and the original owner’s wallet. 

This permanent connection between the SBT and wallet address enhances one’s ability to exist as a real and identifiable person on-chain. SBTs can be used to represent real-world credentials, help online communities create better reputation systems, cut down on fraud due to the permanent association of one’s actions to their SBT, and more. 

The biggest benefit of all is the ability for real-world entities to represent themselves on-chain through wallet addresses that hold several SBTs, each serving a specific purpose (proof of credentials, proof of partnerships, proof of attendance to certain events, etc.). This also makes it possible for individuals and entities to begin to establish a new credit system on-chain, which would allow people to receive under-collateralized loans that are tied to their SBT.  

SBTs can also help DAOs and other types of online communities be more precise in who they choose to issue memberships to based on the verifiable track record of SBT holders. 

When it comes to verifying the number of members or the level of decentralization of a particular crypto community, SBTs can make it possible to distinguish between unique wallets in a way that has not been possible before. 

The obvious risk with SBTs is what happens if your wallet gets hacked. In this case, the methods for recovery include social recovery, community recovery, and revocability. 

With social recovery, the owner of an SBT can assign ‘guardians’ who will have the authority to change the private keys of their wallet. So in the event that they are ever hacked, the guardians (who would most likely be close friends or family) could change the keys to prevent the attacker from accessing the SBT or spending any other tokens in the wallet. 

SBT recovery can also be handled through the voting consensus of a community. With this approach, you would need a majority consensus from members of your Soul community who know the person that was hacked to authorize the changing of their private keys.     

SBTs also have another valuable feature for solving this problem, which is revocability. The issuer of an SBT has the ability to burn a token and then re-issue it to a new wallet. This comes in handy in the event of a hack because the SBT can simply be removed from the hacked wallet and recreated in the original owner’s new wallet. 

ADIs or Soul Bound NFTs: Consolidating Your On-Chain Digital Identity 

There are a lot of parallels that can be drawn between ADIs and SBTs. For one, ADIs allow users to create ‘Authorization Schemes’ that make it possible for holders of an ADI to approve and revoke access to certain information. This is similar to the revocability feature that SBTs offer, and can also be a useful solution to the problem of transferring ID’s. 

In the event that a user with an assigned ADI transfers it to another wallet, there could be an authorization scheme put in place to revoke any permissions or access granted to the sending and receiving wallet, thereby making the ADI no longer useful. You could also place frequent verification checks in place to ensure that the current holder of an ADI is still the original person or entity who received it. If the holder fails a verification check, then their ADI could be automatically revoked pending further review from other members of the network. 

Creating a Universal Identity Layer 

A key advantage of ADIs is the emphasis on multi-chain interoperability with other digital identifier solutions. 

One of the biggest challenges that the Web3 space faces today is the lack of connectivity between the dozens of other blockchain-based identity solutions, each of which is vying for the same goal of achieving a universal identity layer. 

A decentralized identity solution is only as valuable as the number of individuals or entities it represents. The smaller the number of adopters of a digital identity format, the less useful each ID will be when it comes to accurately representing the online or offline behavior and reputation of its holder.  

The ultimate purpose of a digital identity is to serve as a single source of truth and a standardized form of accounting for all on-chain and off-chain activities that the identity holder has participated in and for all digitally native and digitized (or tokenized) assets that they hold. 

Under this description, it is essential that a digital ID be integrated into every Dapp or blockchain that a user has adopted in order to represent that user in the most accurate and complete way possible. 

To this end, the Accumulate is not just focused on creating its own digital identity layer for users to adopt, it is also focused on partnering with existing digital identity providers in order to consolidate these services under one universal identity layer that can most accurately represent the Web3 space in its entirety. 

On Accumulate, we aim to enable users who hold an SBT, an ENS domain, or any other form of digital identity to convert them into our ADI format, similar to how BTC can become WBTC by being embedded into a smart contract that converts the token to an ERC-20 token, thereby giving it functionality within the Ethereum ecosystem.  

Each uniquely formed identity on a different chain or Dapp could be given an ADI wrapper that would enable it to function as a unique ADI within the Accumulate Network.

Ultimately, enabling interoperability between on-chain digital IDs to create a cross-chain universal identity layer will be one of the defining traits of Accumulate. 

Join the Accumulate ADI whitelist today to take part in the next phase of decentralized digital identities. 

In the years following, Factom evolved through innovative developments and the buildout of an ecosystem. Factom secured partnerships with the Gates Foundation, the Department of Homeland Security, and the Department of Energy. The momentum surrounding Factom’s launch and the build-out of its core infrastructure is resounding and what was developed has an everlasting legacy to this day. 

Some of Factom’s early core infrastructure is still used across the entire industry.  Factom created the precursor to modern-day SegWit. Factom introduced anchoring transactions onto Layer 1 blockchains and it was the first protocol with a dual-token model. Although Factom’s name will change, the innovations live on.  

A validator-elected upgrade of the Factom Protocol to Accumulate augments some of Factom’s core features in an entirely new architecture that addresses new use cases across various industries. Parts of the world-class engineering group from Factom continue to work on Accumulate with the upcoming hard fork. 

Accumulate includes several key innovations.

Accumulate Key Innovations: 

• Identity Paradigm 
• Parallel Processing 
• Synthetic Transactions
• Key Management 
• Scratch Accounts 

Identity Paradigm: Accumulate has centered its protocol around Accumulate Digital Identities (ADIs). In Bitcoin, transactions are hashed and then put into a Merkle tree. The tree’s hash is put inside a block, and a blockchain is created together with the roots from other tree hashes. ADIs are independent identities that define their own state, and they are treated like independent blockchains.

Each ADI is distributed across Tendermint networks. These networks, referred to as Block Validator Networks (BVNs), enable Accumulate to scale and maintain a high transaction throughput. ADIs are user-friendly and application-friendly, making them an essential addition to the web3 ecosystem.

Parallel Processing: Every Accumulate ADI is assigned to a BVN. Every BVN is a network of Tendermint nodes, and each BVN can process transactions for thousands of accounts. If a greater scale for the network is needed, then more BVNs can be added. At launch, Accumulate can handle about 75,000 TPS. However, Accumulate can scale to millions of TPS by adding more BVNs. The end result of parallel processing is fast transaction finality and short block times.

Synthetic Transactions: Transactions generated by the protocol in response to user-generated transactions are referred to as synthetic transactions. These transactions are sent to the BVN that manages the destination ADI after it leaves the source ADI. A synthetic transaction is sent each time ADIs interact with another ADI. An ADI doesn’t have to query a BVN node to verify the balance of an ADI; this fact allows the network to be indefinitely scalable.  

Every ADI has its own state and is its own blockchain, a layout that makes Accumulate sharded by design. Transactions routed to an ADI must be processed independently of other ADIs in a network. Communication between BVNs becomes tough to manage due to coordination issues when multiple ADIs are involved in a transaction. Accumulate’s solution is to self-generate additional transactions that perform settlement within an ADI, thus improving the communication scenario. 

Scratch Accounts: This is a way to compress data by limiting the data’s availability. If an ADI’s owner creates a Scratch Account, all the transaction hashes belonging to the account will be pruned at 2-week intervals (unless the owner decides to store the data off-chain). While transaction hashes are pruned, the root hashes are saved on-chain. These accounts provide validation proof without putting too much stress on the blockchain. Scratch Accounts ultimately reduce the cost of using the blockchain for consensus building.

Key Management: Commonly, an organization’s personnel has a hierarchy of different levels of capabilities, access levels, and administrative privileges. A Key Book is a set of Key Pages that are structured by priority, and a Key Page outlines what keys are required to validate a transaction. Accumulate can reproduce this common corporate framework on a blockchain using ADIs with Key Books to define access control. Key Books define these capabilities and access control, such as which ADI in an organization’s Key Book has password changing capability or which ADI has certain decision-making authority.  

Learn more about these Accumulate Key Innovations in the whitepaper and this recent YouTube video:

The importance of interoperability is evidenced in the massive influx of funding that has been poured into creating new solutions to unite the various blockchains and reduce the frictions of onboarding and moving capital throughout the crypto ecosystem. 

Composability, which is the ability to clone and integrate smart contracts (including Dapps, tokens, and DAOs) into different networks, sits at the top of the list of most sought-after qualities for blockchain developers. 

Whichever project can tackle the many technical challenges to build a truly secure and trustless cross-chain protocol will become the gateway for all economic activity in the web3 space.  

Given the stakes at hand, It is no surprise that LayerZero, a new omni chain interoperability protocol recently raised $100m to fund its mission to build a “messaging transport layer for smart contracts to communicate between chains.”

Accumulate has a similar mission to establish a communication and audit layer for individuals, entities, and blockchains to transact with each other using Accumulate Digital Identifiers or ADIs.

Below, we compare how LayerZero and Accumulate are tackling cross-chain interoperability and how Accumulate differentiates in its use of ADIs as the core instruments for bridging blockchain networks together. 

What is LayerZero?

LayerZero is a messaging transport layer for smart contracts to communicate between chains.

The project has developed a protocol for standardizing communication between different blockchains.

A cross-chain transaction between two chains (chain A and B) on LayerZero involve 3 components:

1. A transaction initiated on chain A (tA)
2. A communication protocol between A and B
3. The message (M)

In order for there to be valid delivery of a message, the protocol states that M is delivered if and only if tA is committed and valid.

According to LayerZero’s whitepaper:

The key idea underpinning LayerZero is that if two independent entities corroborate the validity of a transaction (in this case, tA) then chain B can be sure that tA is valid.

Given two entities that do not collude, if (1) one entity can produce a block header for the block containing tA on chain A, (2) the other entity can independently produce the proof for tA on that block (transaction proof), and (3) the header and transaction proof in fact agree, then the communication protocol can deliver m to the client on chain B with the guarantee that tA is stably committed on chain A.

The two independent entities referred to are an Oracle and a Relayer. By leveraging an Oracle, which provides the block header for the transaction and a Relayer, which provides the proof associated with the transaction, LayerZero claims it can guarantee valid transaction processing between chains.  

What are the benefits of LayerZero?

The biggest benefit is reducing the friction of moving funds from one chain to another in a relatively trustless way. LayerZero sees itself as a version of the Inter-Blockchain Communication protocol (IBC) for the entire blockchain ecosystem, which makes the potential for this project quite significant if new and legacy chains can adopt it. 

What are the limitations? 

The biggest concern with LayerZero is the lack of certainty around the security measures that are meant to ensure the validity of cross-chain transactions. 

Stating that all the protocol needs are two non-colluding entities to provide a block header and proof opens to doors to several scenarios where backdoor collusion could potentially occur.

For one, the relayer and Oracle could both be represented by the same entity off-chain, or one entity could be engaged in a different transaction with another that influences the objectivity with which cross-chain transactions are verified. Additionally, central points of failure within the bridging process could create attack vectors that render wrapped assets worthless, just like in the case of the recent Wormhole attack where wrapped ETH on Solana became worthless once all the locked ETH was stolen.  

By contrast, Accumulate uses ADI’s as the core feature to create cross-chain interoperability. 

Rather than using the standard smart contract bridging model to transmit messages between sender and receiver from one chain to the next, Accumulate actually onboards both the sender and receiver unto its own network and allows each entity to represent itself as an ADI. 

These entities can then exchange messages directly on one chain without relying solely on cross-chain bridges. This method can be compared to creating a communication channel where entities can connect, transact native Accumulate assets with each other, or communicate their intentions to transact assets on other chains, all in a manner that is decentralized and trustless. 

Accumulate’s design enhances the value of cross-chain bridging solutions by establishing a credibly neutral communication layer for counterparties on different chains to more directly exchange messages and also keep an audit trail of the activities and entities behind the Oracles and Relayers transmitting data between chains on the LayerZero protocol. 

Single Source of Truth for Cross-Chain Bridges

As a communication and audit Layer, Accumulate is able to track the state and validity of contracts stored on third-party chains like Solana, Tezos, Cardano or even multi-chain networks like Cosmos or Polkadot. This means that entities represented as ADIs can effectively process smart contracts on these chains. 

For example, an entity could manage the transfer of their assets from one chain to another using only the Accumulate network to communicate their actions between different ADIs. This method allows Accumulate to leverage other bridging solutions on the market while serving as a single source of truth for all cross chain bridge transactions. 

What’s more, through Accumulates data anchoring solution, this record of cross-chain transfers can be backed up on the most decentralized blockchains, Bitcoin and Ethereum, ensuring that the audit trail is truly tamper proof. 

Connecting the Cryptoverse and Traditional Economy

Another major advantage of Accumulate is its focus on bridging the blockchain ecosystem to the traditional economy. Even at a valuation of $2 trillion, the crypto markets are still very small in comparison to the multi trillion dollar economies of the equities, commodities, real estate and energy markets. The Accumulate network is designed from the ground up to enable entities in the traditional economy to make a seamless transition to web3 by adopting decentralized digital identifiers, which can be used to represent everything from people to documents, to physical and digital corporate assets (patents, materials, accounts receivables, etc). 

While achieving interoperability amongst today’s blockchain networks can help lower the barriers to adoption, the benefits that this creates cannot be fully realized without also developing solutions to onboard the traditional economy so that new entities and net new capital can take advantage of the frictionless experience of interacting with multiple networks. 

The vast majority of growth that the blockchain ecosystem will see in the coming years will be from external entities embracing more decentralized solutions for transacting, accounting and governance. 

Working in tandem to improve cross-chain interoperability  

While there are some key differences between Accumulate and LayerZero, it’s possible that by each project maximizing its strengths, their combined solutions could radically improve the efficiency and transparency of the cross chain bridging process. 

According to LayerZero’s whitepaper –

“The Relayer is an off-chain service that is similar in function to an Oracle, but instead of fetching block headers it fetches the proof for a specified transaction… The protocol itself does not require any specific implementation of a Relayer, and in theory the users of LayerZero could even implement their own Relayer service… In practice, LayerZero provides the Relayer service while the Oracle is handled by Chainlink’s decentralized oracle network and associated consensus mechanisms. “

Using this description, we can imagine a scenario where all Oracles and Relayers are represented as ADIs on Accumulate, creating an additional layer for these entities to communicate the data they are validating and also provide a decentralized audit trail that is completely independent and exists outside of the LayerZero network. 

This mechanism could be used to prevent possible collusion by linking all off-chain and on-chain participants within a Relayer or Oracle entity to an ADI through the use of sub-identities.  

Conclusion

LayerZero and Accumulate are highly innovative projects taking different approaches to unify a fragmented blockchain ecosystem. 

LayerZero aims to connect all blockchains together through a universal cross-chain bridging protocol that leverages oracles and relayer working indepently to verify bridged transactions. 

Accumulate aims to connect all blockchains together and form a bridge to the traditional economy through the use of ADIs, which will represent individuals, entities and assets that exist and interact on top of a single communication and audit layer.

A hypothetical collaboration between these projects could serve to resolve their weaknesses while highlighting their strengths. For example, the risk of collusion between relayers and oracles on the LayerZero protocol could be mitigated by having both parties and their associated accounts all be represented at ADIs on Accumulate in order to build an independent and decentralized audit trail. 

At the same time, the lack of native smart contracts for cross-chain bridging on Accumulate could present an opportunity for LayerZero to serve as an execution layer for blockchain assets not represented on Accumulate, allowing Accumulate to focus on reconciling these cross-chain transactions through their ADI-represented counterparties in order to establish a single source of truth for the blockchain ecosystem.

Major enterprises like Molson-Coors and HSBC are buying virtual land in the Metaverse with very real money. JP Morgan has forecasted that over $1 trillion will pour into the metaverse annually. These investments signal that the Metaverse could be a major part of social and corporate life for enterprises and individuals life in years to come.

Enterprises in the Metaverse by the Numbers: 

• $1 trillion: The annual amount of money JP Morgan anticipates will pour into the metaverse 
• $8.3 billion: Combined market cap of The Sandbox and Decentraland as of the time of this writing, two of the most significant metaverses available today. 
• $4.3 million: Current record-setting purchase amount for a single piece of virtual land

What Is The Metaverse?

If the internet is a 2D space where information is primarily conveyed through text, images, and videos. The Metaverse is a 3D version of the internet where user experience will be focused more on immersive experiences with speech, hearing, and even touch. People (and companies) will be able to buy and sell products, interact with customers or customer support staff, sign contracts, play games, and do many other “real world” activities in a virtual space.

Facebook rebranded itself as Meta in October of last year, announcing that the company’s next big move would be the development of a virtual reality world called the Metaverse. What exactly as the Metaverse though, and what are the implications of this new technology on our daily lives?

Neal Stephenson coined the term Metaverse in his 1992 classic book Snow Crash. Stephenson’s novel partially takes place in a virtual reality world where people’s personalized digital avatars mingle with each other, research new ideas, see concerts, duel with swords, and live in lavish homes of their own design (kind of like The Sims). In Stephenson’s book, many people spend as much time in the Metaverse as they do in the real world. Not only that, but the first investors in Metaverse real estate turn cheap plots of virtual land into real-world fortunes. 

Stephenson is not just a writer — he is a highly-regarded programming philosopher who serves as an advisor to Jeff Bezos’s space company Blue Origin. His decisions have weighed well beyond the world of literature. Now Mark Zuckerberg and hundreds of other companies want to make Stephenson’s futurist vision a modern reality. 

Meta is not the only major player in the development of the Metaverse. Other tech titans like Microsoft are developing Metaverse technology, and a number of companies are focused on virtual real estate. However, other blockchain companies have also come into the space such as Decentraland, Upland, and The Sandbox (the latter starting as a computer game before transforming into a blockchain-focused company following a 2018 acquisition by Web3 investment powerhouse Animoca Brands).

Read this blog post to learn more about how Accumulate ADIs can be used in the Metaverse. 

What is Metaverse Real Estate?​​

As mentioned before, a plot point in the novel Snow Crash is the development of virtual cities and real estate markets. In a move of life imitating art, projects like The Sandbox, Decentraland, and Upland are creating the foundation of the Metaverse’s real estate market. Virtual land in these metaverses can later be used to develop projects like virtual bars, cafes, concert venues, and offices – although some of the uses of this land are speculative at this point.

In Animoca’s The Sandbox, people can buy packages of virtual land and other digital assets with Ethereum and Polygon. Many larger parcels of land on The Sandbox go for hundreds of thousands, if not millions, of dollars.

A Metaverse Before Facebook 

In fact, the current record for a virtual real estate in The Sandbox purchase was set in November 2021 by Republic Realm, a metaverse investment firm founded by former Atari game developers. Republic Realm purchased the record-setting Sandbox parcel, which was the equivalent of 1,200 city blocks, for an astonishing $4.3M. Again, although it’s highly speculative, this industry is just heating up so it will be shocking to imagine the evaluations as more money pours in from the likes of enterprises if they follow suit of HSBC.

The Sandbox project predates Facebook’s rebranding to Meta. Prior to Facebook’s rebranding, parcels in the Sandbox started at around $2000. A month after Meta was revealed, the cost of parcels in the Sandbox had increased to over $11,000. Many real estate speculators are buying land based on its proximity to other developments. Buyers are hoping that, much like physical real estate, the value of property will increase based on what is in the neighborhood. If someone buys the land next to Snoop Dogg’s $450k virtual plot of land, called Snoopverse, or the Bored Ape Yacht Club’s virtual headquarters, they are betting that these neighborhoods will become trendy destinations in the future. Other destinations to consider are close to roads, casinos, and other prominent headquarters. 

Other projects like Decentraland and Upland offer similar value propositions as The Sandbox does. While Decentraland operates similarly to The Sandbox, Upland is more like a Web3 version of Monopoly-meets-Google maps where players trade, buy, sell, and earn a stake on virtual properties that are linked to real-world addresses. 

How To Buy Land In The Metaverse

For your average buyer who is only purchasing a small plot of virtual land, land can be purchased in a similar way to purchasing any other NFT.  You can simply connect and fund your crypto wallet, such as Metamask, browse available land on the platform of your choice or on OpenSea, then bid on the land or buy it outright. The NFT of the land will be transferred to your wallet and then integrated into your in-game experience

If you are looking to buy a more substantial parcel of land, a number of virtual real estate brokers have popped up in the last year. These brokers will work with the Metaverse provider to get you the best deal. There are even a few mortgage companies that specialize in Metaverse deals. As the space matures, more of these businesses will crop up to assist with virtual land purchases. You’ve probably met quite a few real estate agents, but have you met a virtual real estate agent? Not yet. Can you imagine a world where virtual home mortgages pop up so that, as Stephenson’s Snow Crash becomes more of a likely reality, people build a second life for themselves customized as much as they would customize their first house. 

Enterprises and the Metaverse

One reason that Metaverse real estate is gaining traction is due to the major brands that are purchasing land in the Metaverse. The Sandbox alone has sold land to businesses in over 200 major partnerships, including deals with Gucci, Adidas, and the TV show the Walking Dead. Some companies are spending millions of dollars on land, believing that it will significantly increase in value in the future and that the Metaverse will become a new media channel for their business.

PricewaterhouseCoopers (PWC)

Big Four accounting powerhouse, PwC, purchased land on The Sandbox for an undisclosed sum with the intention of building a Web3 advisory hub for next-generation accounting and tax services. William Gee, a Hong Kong partner at PwC, called the Metaverse a “digital phenomenon.” They not only hope to use the land to offer advice and services, but they hope to assist smaller startups and family-run businesses that want to grow in the Metaverse. These types of businesses are often eclipsed by venture capital funds and conglomerates and can struggle to gain traction in new markets.

Molson-Coors (Miller Lite) 

Since they were unable to buy ad time during the Superbowl due to a sponsorship conflict with Bud Light, Miller Light opted to create the first branded bar in the Metaverse instead – where patrons could interact with Miller’s Superbowl ad. Molson purchased land and built the Meta Lite Bar in Decentralandwhere patrons aged 21-and-over could watch the game, play darts, talk to other fans, earn swag, and watch the ad – which lasted for 20 minutes and included interactive features. Some of the wearables given away at the bar during the game were later resold for $250k. Miller’s Superbowl event was the largest event to ever take place in Decentraland and the 20-minute ad was said to be an absolute hit. The Meta Lite Bar also had an IRL component that accompanied the bar featuring physical giveaways.

HSBC

On March 16th, 2022 HSBC became the first bank to buy land in The Sandbox, and the second bank to purchase virtual real estate after JP Morgan’s Decentraland lounge. The enterprise will use this land to create a hub to engage with physically and electronically. This move happens as HSBC closes physical locations across England, indicating the bank may be investing in a virtual future in lieu of a physical one.

JP Morgan 

JP Morgan, perhaps remembered to crypto faithful for its flip-flopping stance on Bitcoin, has forecasted that the metaverse will be a $1T a year industry. They’ve planted their virtual flag in Decentraland with the opening of a digital lounge called Onyx. The lounge is located in Metajuku mall. When you enter the lounge, a few things may stand out to you like the portrait of current JP Morgan CEO Jamie Dimon and a roaming tiger. The price of MANA, Decentraland’s token, shot up 8% on the day that JP Morgan announced their entry into the space.  

Meta (Facebook)

Many people heard of the Metaverse for the first time when Facebook rebranded to Meta –a stunning move from one of the most powerful companies on the planet. Meta aims to lead the next revolution in social technology, just as they did with Facebook. Using their proprietary Oculus VR headset, Meta wants to bring people onto the Metaverse for social connections, entertainment, gaming, fitness, work, education, business, and more. Meta’s rebrand has been a boon for all Metaverse adjacent companies. Real Estate values in the Metaverse saw a 500% increase in one month after Facebook rebranded. There has been an explosion in new Metaverse startups and businesses due to Zuckerberg’s seal of approval.

Republic Realm

As previously stated, in November of 2021, Republic Realm made headlines after purchasing 492 parcels of Sandbox land for $4.3 million dollars – which was the largest purchase of digital real estate at that point in time. The digital real estate company is partnering with Atari to develop the land into something magical. They envision that the virtual development they create will be similar to Minecraft and will entice a new generation of gamers to dream big in the Metaverse.

Atari

After pioneering the traditional video game world for a quarter-century, Atari is moving on to the metaverse through the development of a crypto casino in Decentraland’s Vegas City – a Metaverse city dedicated to gaming and gambling. They bought 20 parcels of land in Vegas City’s casino quarter, and have developed an ERC-20 token called Atari token that can be used on their proprietary chain when gambling in their casino.

In Conclusion

JP Morgan has forecasted that over the metaverse will be a $1 trillion market opportunity in yearly revenues. Enterprises from Molson-Coors to HSBC are buying virtual land in the Metaverse with very real money. The Metaverse could be a major part of social and corporate life for enterprises and individuals in years to come. As other enterprise brands continue pouring money and resources into the metaverse, it will be exciting to see how the industry electrifies.

The work Accumulate is doing for identity-first, human-readable crypto addresses will usher in the next era of ease into the crypto adoption process. That identity-based address that Accumulate offers is a registry similar to the one that DNS created for the internet. 

Topics covered in this post include: 

• What is DNS? 
• How crypto addresses have a similar issue to the one IP addresses faced 
• Accumulate identity-based addresses 

What is DNS? 

Before DNS, domains were long and not easily readable by humans. Then when the Domain Name System arrived, IP addresses of the world wide web were translated into Uniform Resource Locators (URLs) like Google and Reddit.  

Every single device that is internet-connected has an associated Internet Protocol (IP) address. Then, another machine utilizes the IP address to identify the device that is being searched for. The DNS takes away what was previously a requirement – knowing the complex IP address. For example, 192.158.1.38. 

The DNS has acted like the Internet’s Yellow Pages and has included domain names that we use to get to the places we want to visit on the web. As a result of the DNS, people are able to do things like access their beloved social media channels, post questions on Reddit, and check the score of sports games. 

Any time that the internet browser interacts with the IP, the DNS translates the string of numbers associated with the IP into a URL. 

The work Accumulate is doing with blockchain addresses is parallel to what the DNS did and still does for IP addresses… makes crypto addresses human-readable. 

Problems with Today’s Crypto Addresses 

There are several problems with the state of long alphanumeric blockchain addresses that we use to make crypto transactions. Primarily, blockchain addresses are not user-friendly and they lack easy recovery methods. While proponents argue that this is a built-in security feature, there are ways to achieve a proportionate amount of security without all of the hassles that the current state of blockchain domains cause. 

Blockchain addresses are not user-friendly: A BlockCAT survey asked participants to self-assess their anxiety when sending a crypto payment. Over 94% of respondents admitted that they worried about making a mistake when sending crypto and an additional 11% admitted to sending money to the wrong address (Forbes). Besides someone with savant-like abilities, who has the capability (or time) to remember these long alphanumeric crypto addresses that are used today? Short answer: no one. Instead, the world needs solutions that can be used more easily. 

Accumulate’s user-friendly, human-readable identities address this issue by being derived from names we are familiar with. 

Lack of recovery: Many stories have circulated about the number of people who have lost access to their crypto accounts which has resulted in a loss of funds. For crypto payment’s adoption level to evolve further into the mainstream, account recovery needs to be a focus. It produces a lot of anxiety to store crypto with the chance that the custody could be gone if the person or entity loses access to the private key. While this system has been great for security, it’s almost too good in the sense that an estimated 20% of Bitcoin, or $140 billion, is inaccessible due to lost private keys. 

Accumulate offers a hierarchical alternative where the master key for identity can reset the keys that are lower on the hierarchy list. Imagine a corporation on the blockchain in which the company’s chairman, president, or CEO is able to reset corporate keys for a new hire that hasn’t fully earned the time-tested trust of the company yet. 

Accumulate Identity-Based Crypto Addresses

Said in a different way, Accumulate acts similarly to a human-readable, Web 3.0 version of a URL. While Web2 and its associated companies had the DNS, Web3 has Accumulate identities. Through Accumulate identities, blockchain addresses become: 

• Readable: Accumulate identities are strings of readable texts like Acc://BlueOrg.
• Secure and Owned: An identity’s owner, whether that be an organization, person, or even a building, has the capability to manage with best-in-class security functions and key privileges. 
• Managed: Within a corporation, ADIs can be assigned to different departments, and each department has the ability to create a permissioned identity hierarchy with a range of security levels. 

Essentially, Accumulate takes the long public crypto addresses that we all know and detest, then replaces it with a simple identity that’s easy to see and understand. The once complicated 1BvBMSEYstWetqTFn5Au4m4GFg7xJaNVN2 now becomes Acc://BlueOrg. 

Accumulate vs Ethereum Name Service 

Ethereum Name Service (ENS) is an Ethereum-based domain solution that provides a URL similar to a name or email that is substituted for a crypto address. Essentially, ENS translates and simplifies the long, alphanumeric text string that people are used to. With the ENS, 0xb764f5ea0ba39494ce839613fffba94229579261 is simplified to Drew.ETH. 

Accumulate identities are similar to ENS addresses in that you can send and receive tokens to a simplified blockchain address. However, Accumulate identities have a much more robust range of native features which include readability, security, and management (as previously mentioned). While ENS is a strong candidate for personal accounts, Accumulate’s enterprise-grade security is strong enough for some of the most complex entities in the world like governments and major corporations.

In the case of Web3, narratives play a critical role in helping people deconstruct their preconceived notions about the nature of money and value while embracing a new understanding of these concepts that are supported by open, permissionless, and decentralized technologies rather than blind faith in top-down institutions.

Within the broader narrative of Web3 are several sub narratives (or themes) that have emerged over the past few years, propelled by famous investors, entrepreneurs, and thought leaders in the industry, including Raoul Pal of Real Vision Finance and Global Macro Investors (GMI).  

These themes include the idea of crypto’s future being multi-chain, enabling seamless interoperability between chains, developing a UX layer to facilitate ease of use of Web3 applications, and an Identity layer to pin a user on-chain activities to a single digital identity that can be used to build an online reputation, access credit and more. 

In a recent GMI publication, Raoul describes how these themes are all centered around the harnessing of blockchain technology to facilitate more transparent, trustless, and efficient exchanges of information and value across multiple chains using a common framework (or ‘layer’) to facilitate peer to peer multi-chain communication.

The Accumulate network is at the forefront of establishing a decentralized communication and audit layer for all individuals, entities, and blockchains to transact with each other, enabling the creation of a truly global marketplace built on open and permissionless technology. 

We highlight some of the features we are developing and how they align with the themes promoted by prominent players in the Web3 space.

Multi-Chain Future 

The benefits of open and permissionless technology include the ability for anyone to build their own vision for a decentralized future. This includes launching new blockchain networks, new decentralized applications (or DApps), and new tokens that accrue value and incentivize user adoption of these platforms. 

Today, Web3 represents one of the last examples of an unrestrained and truly free market. With the help of nothing more than a few lines of code and a passionate developer community, new blockchain networks are able to emerge and engage in healthy competition and collaboration with existing chains, much to the benefit of the millions of users and investors who are free to choose which networks to store, transfer or trade their funds.  

In the past year alone we have seen a significant increase in new layer 1 blockchains like Solana, Binance Smart Chain, Fantom, and Avalanche that seek to challenge Ethereum’s dominance. 

Each proclaims to offer a more scalable network that can support faster transaction speeds while making limited compromises to decentralization and security. 

A multi-chain future provides consumers with a choice of different blockchains to choose from based on their preferences for speed, security, or decentralization. Users can send funds to Solana to make fast and low-cost trades while placing higher value assets on the Ethereum network because it is more decentralized and therefore more secure. 

The Accumulate Network embraces the multi-chain future by enabling all of these networks to converge on top of a communication and audit layer where individuals and entities are represented as digital identifiers. 

Lack of blockchain-agnostic interoperability solutions remains one of the biggest hindrances to the global adoption of web3. Imagine each blockchain network as a city and the bridges between cities serving as an analogy for the bridges we use to transfer tokens such as Wormhole or the Inter-Blockchain Communication Protocol (IBC). 

Now imagine if each bridge to a new city required a different car in order to cross, or if certain cities required moving through multiple bridges as opposed to a direct path to your destination. 

This example broadly describes the current state of blockchain interoperability, connected in certain areas yet still too fragmented to enable users at the enterprise and institutional level to feel comfortable moving billions of dollars on-chain.

Accumulate’s contribution to the Web3 space comes in the form of the Accumulate network and Accumulate digital identifiers or ADIs. 

The Accumulate Network is a layer 2, proof of stake blockchain that serves as the de-facto communication and audit layer between all blockchains, enabling the seamless transfer of tokens or other kinds of digital assets between Accumulate Digital Identifiers (ADIs) across different chains regardless of their consensus mechanism

ADIs are human-readable addresses similar to website URLs that are chosen by individuals or assigned by organizations to represent their presence on the blockchain.

Individuals or entities that have wallet addresses on Layer 1 and Layer 2 networks can use ADIs to represent themselves on the Accumulate network. 

At the same time, companies can connect to the Accumulate network directly and set up ADIs to represent themselves along with different aspects of their organization as sub-identities underneath a single ADI. This can include specific departments, individual roles, or even corporate assets. 

Creating a Single UX and Identity Layer for Web3

As Rauol Pal points out in his GMI piece, in the future, consumers of decentralized applications will no longer need to be concerned about what blockchain network they are currently using. 

In a world where blockchain interoperability is perfected, the act of transferring tokens across chains will become as seamless as sending an email from Yahoo Mail to Gmail to Outlook. While the front-facing applications look different, the underlying infrastructure for each email provider is unknown to the vast majority of users. 

This is what the future could look like under the ADI system. Users represented as ADI’s would be able to migrate tokens from Dapps on Solana to Dapps on Avalanche, Ethereum, or other networks all underneath the UX and identity layer of the Accumulate networks.

For corporate entities, ADIs would provide a common framework for the execution of smart contracts between other regulated entities chain, as well as the seamless and efficient audits of transactions between ADIs without the need to investigate transaction data on individual chains. 

Accumulate allows blockchain networks to outsource execution functions to a scalability-optimized and identity-based network. At the same time, Accumulate leverages the security of decentralization-optimized blockchains like Bitcoin and Ethereum to backup transaction data between ADIs in order to ensure that the data remains tamper-proof and censorship-resistant.

Identity as a Core Infrastructure of Web3 

While other interoperability solutions like Layer Zero and Thorchain seek to reduce the friction of sending messages and tokens between chains, Accumulate is the only solution that achieves this through a robust and customizable identity layer. 

We view digital identity as a core piece of Web3 infrastructure that provides legitimacy to the concept of property rights in the digital world. 

Without digital identity, property rights of token assets could only be enforced through the protocol that dictates how pseudonymous wallet addresses interact. In the event that these protocols fail to prevent theft or fraud, a digital identity system can serve as a backstop by using reputation or conducting on-chain audits on wallets addresses owned by a single ADI as a means to catch bad actors or prevent them from using certain Dapps or protocols.   

Without a cross-chain identity system, networks are forced to string together cross-chain interoperability solutions that only work for specific address formats and require adjustments when dealing with a new address from a new chain. 

For corporations and governments that operate on a global scale, the inability to view the web3 landscape as one whole instead of multiple-segmented parts presents a huge problem in terms of usability, transparency, and regulatory compliance. 

This is why we strongly believe that ADIs can serve as the bridge that not only connects blockchain networks to each other, but also connects the traditional economy to the Web3 space under a framework that enables open, permissionless, and censorship-resistant transactions while ensuring that the safety, compliance and usability needs of corporations, governments, and other institutions are met. 

Ultimately, Accumulate is at the center of multiple converging narratives in the web3 space. 

These narratives and themes are providing web2 users with a framework of understanding that allows them to appreciate concepts such as decentralization, censorship resistance, permissionless-ness, and digital property rights. 

Just as disruptive new technologies rely on narratives to communicate their value to the general public, these narratives naturally lead to expectations that the new technologies must meet in order to convert user interest into user adoption. 

Accumulate Network aims to become the solution that achieves this conversion by realizing the promise of an interconnected multi-chain future for Web3 that will propel free trade and the free flow of capital between the digital realm and the traditional economy to new heights.  

Accumulate can further enhance data in this type of partnership with secure identity and key management across any Web 2 or Web 3 address– from blockchains, to enterprise tech stacks, to websites. Furthermore, Accumulate can enhance data on protocols like Arweave through pruning, validating, scaling, and integration, thus making layer 1’s more interoperable. 

Some of the topics covered in this blog include: 

• What is Solana?
• What is Arweave?
• Why the Solana and Arweave partnership is mutually beneficial 
• How Accumulate can enhance data in a partnership like this 

What is Solana?

As one of the fastest growing blockchains in the world, over 400 Web 3, DeFi, and NFT projects are building in the Solana ecosystem. It was founded in 2017 with the Solana Foundation headquarters based in Geneva, Switzerland. The consensus mechanism combines the underlying Proof-of-Stake infrastructure that is prevalent across many crypto projects, with a unique consensus known as Proof-of-History. 

Solana was founded by Anatoly Yakovenko who started his professional career at Qualcomm. In just a few years, Yakovenko became a senior engineer with the company before leaving it for Dropbox. Then in 2017, Yakovenko began building what became Solana with fellow Qualcomm alum Greg Fitzgeral. The pair founded Solana which eventually attracted other former Qualcomm employees. In 2020, SOL token was publicly released, and the Solana Protocol was officially born. 

(Image taken from DeFi Llama) 

Solana has short processing and lower block validation times compared to other blockchains. The speed and efficiency of the Solana blockchain have also garnered attention from institutions and enterprises as well. However, it’s not too big for main street retail investors to use either, a greatly-desired target segment within the industry that Solana has fallen in favor with. Particularly, Solana’s burgeoning DeFi ecosystem, which has $11.5B locked into it (as of December 2021), has one of the highest totals locked in smart contracts across all active projects in the entire world. Additionally, almost $2B worth of NFT transactions daily on Solana. 

What is Arweave? 

Arweave is a permanent, censorship-resistant data storage system used by the likes of SKALE and Blockswap due to Arweave’s ability to offload costs and complexity for public data storage. SOLAR Bridge can adopt sustainable data while addressing scalability. Solana was the first bridge built to Arweave.

In Web 2, over 30% of web links break on the internet within two years. However, Arewave introduced a solution to this: a global, community-driven, permanent data layer called the permaweb that is built on top of Arweave. The native AR token pays an up-front fee for data storage then earns interest to cover the cost over time. The permaweb allows any person to contribute or add images across any distance or period of time. On the permaweb, there aren’t any 404 errors or quick edits.

Arweave has an extensive list of partners, including Techstars, Coinbase Ventures, Multicoin Capital, and Andreessen Horowitz. 

Why the Solana and Arweave Partnership is Mutually Beneficial 

Adding to what Decrypt says, this is a win-win partnership for the brands involved and their clients and community. Solana and Arweave developed a partnership that delivers a genuinely collectively-owned, decentralized data solution. In addition to providing the benefit of community ownership, this type of data storage system is beneficial to both protocols. 

The Solana Arweave partnership is beneficial because: 

• Adds interoperability, perpetuity, and decentralization to Solana 
• Takes intensive design time off of Solana’s shoulder 
• Community driven mission 
• Store and forget 

In a statement on Arweave’s blog, Yakovenko admired Arweave because he believes it can add interoperability to Solana. Furthermore, the Solana founder believes that it would be more rational to work with what Arweave has designed rather than building its own costly solution. It would have been an expensive, time-intensive deployment when Solana’s developers are already working on other projects that have no choice but to be designed in house. 

First, the collective ownership of the hard drive ensures an impermeable data storage tank that can be accessed in real-time but secured across many nodes. The risk of corruption is also limited through the Solana and Arweave partnership. Critical records such as document credentials and government-derived IDs become permanent entries on a ledger, making it impossible for forgery. 

Read more about how blockchains can transform document credentialing right here. 

SOLAR Bridge is a mechanism for validators on the Solana ecosystem to transition into a “store and forget” state. Once a transaction is validated, it will be stored on Arweave permanently so that such a transaction does not need to be verified again. 

Arweave offers advanced functionality for public data using decentralized, censorship-resistant technology. Bering Water Group, a Hong Kong-based investment firm that backs Arweave, has developed the SOLAR Bridge. The bridge serves as a core, foundational product of the Arweave and Solana partnership. SOLAR Bridge stores ledger data in real-time from Solana’s blockchain, ensuring a truly public infrastructure.

How Accumulate Can Enhance Data in This Type of Partnership 

Accumulate is creating a secure network of blockchain services that will support a variety of tasks such as payments, social networks, regulations, business, education, and entertainment. It can add to other ecosystems by further enhancing data systems through identities, security, pruning, validating, integrating, and scaling across Web 2 and Web 3 platforms. 

In Conclusion

The Solana-Arweave partnership is the epitome of how two strongly developed protocols can offer complementary resources to create an end-product that’s mutually beneficial for all parties involved. 

Accumulate offers a universal interconnected protocol that can benefit Web 2 and Web 3 data. As a core benefit, Accumulate makes layer 1 blockchains more interoperable and secure, thus further enhancing the data on protocols like Arweave through pruning, validating, scaling, and integrating it with other chains.

In Ancient Greece and across the Mediterranean, oracles were known to be a communication medium between the people, the mystics, and gods/ goddesses. Renaissance artist Michelangelo once painted an oracle in the infamous Sistine Ceiling. 

Not too dissimilar, oracles, as we’ve come to understand today, serve as communication vehicles between blockchains and external systems such as databases, IoT devices, and other blockchains to inform the execution of a smart contract. 

This blog post describes:  

• What are oracles?
• Why oracles are essential for blockchain technology 
• Oracles provide functionality for intelligent contracts
• Issues with oracles that are used today

What are Oracles?

Oracles, as we’ve come to know them today, have transformed alongside technology. A blockchain oracle is an entity or device that connects a blockchain with data that is located off-chain (BetterProgramming). Put a different way, oracles are smart contract enforced connection points between blockchains and any external system that is based upon inputs and outputs. 

Why Oracles are Essential for Blockchain 

Oracles enable the philosophy of a user-directed Web 3.0 to become alive by filling many different roles. The most significant use case is to create a simple, manageable oracle for a wide range of participants and use cases. Oracles enable Layer 1 Protocols like Bitcoin, Ethereum, and Accumulate Network (formerly Factom Protocol) to query data sources from other chains or off-chain databases. 

For example, let’s pretend that an airport wants to ensure that a person has a driver’s license that is valid from a specific state. That airport could use a blockchain oracle to communicate with the state driver database to ensure the information is valid. Once the driver’s license is found in that state’s database, a smart contract can be executed that is dependent on the validity of the license being in the database. 

At the early stage of blockchain oracles, communication mainly existed from one chain to another. However, due to need-based use cases such as checking an ID at an airport, communication between blockchains and external databases are becoming more popular. 

Oracles Provide Functionality to Smart Contracts 

Smart contracts need to be fed data in order to be logically executed– they need to know if X is true so that Y can occur. Essentially, oracles are vessels that express the information to know that X is true in the real world so that Y can occur in the blockchain’s smart contract. 

As blockchain technology continues to evolve with the expansion of Layer 1 protocols, more smart contracts will be built that require decentralized oracle technology. 

Issues With Oracles 

Despite the market’s progress in the development of oracles, there are still several looming issues: 

• Lack of oracle reliability when dealing with private information 
• Efficiency decreases when data arrives from a single source of private information 
• Networks are congested and have limited bandwidth 

The current industry-leading oracle providers work efficiently for public data, but not for private data or a single data source. This is problematic since the security of private data is of utmost importance, especially now, as decentralized oracles enable on-chain code and off-chain infrastructure to pair together in a way that’s never been done before. 

Oracle security has never been more critical because the value of oracles securing DeFi assets continues to rise by the day. Any oracle exploitation is destructive for DeFi. Thus, blockchain oracle networks need to enhance their security at the same rate that DeFi expands. Additionally, blockchains require reliability to operate in a secure way to handle any type of sensitive data, whether that be real estate market data or government-issued IDs. Oracles muddle the reliability of blockchains considering many oracles import data to blockchains (Computers & Electrical Engineering). Oracles, especially from multiple sources that deal with private data, need to have the wherewithal to perform consistently. 

Another barrier right now is the human requirement. Some oracles require human-involvement 

However, as Lo, Xu, Staples, and Yao uncovered using Fault Tree Analysis, reliability dips in oracle providers for several reasons, the most significant being the involvement of humans to compete over who has the strongest oracle. These issues will work themselves out though as technology advances.  

As a final note on issues with modern oracles- while the popularity of Ethereum increases, the network is becoming increasingly congested with transactions. The cost for transactions is also increasing due to the rising demand. Gas fees are a real issue. This issue lowers the bandwidth that blockchains can handle, thus indirectly lowering the operating efficiency of oracles that the network relies on. 

Accumulate Can Help Serve Private Market Asset Data 

A proposed marketplace to be built on Accumulate is focused on serving private market asset data, where the valuation of the asset is credentialed by its owner.

For example, a security-compliant developer could create a commercial real estate index token on the platform. Accumulate will feed the token with off-chain commercial real estate valuation data such as all of the multi-family residences in the Miami greater metropolitan area. Accumulate will then aggregate the valuation data of a whole array of assets, then that data is fed into a smart contract. Since this is a single data source, all of that data should be synced to the blockchain to add to the data’s security and reliability. When looking at the price feeds, you can see all the specific data feeds since all these assets are tokenized, and the data is embedded in the token, albeit in a hash format. 

You’re able to verify that a particular price feed is made up of these specific assets. Then another person can also see by looking at the ledger to view the exact feed that created this index price. The oracles in the above example are made to facilitate not only Accumulate’s private market data but also external private market data. 

Use Case Example: Sponsored DAO 

An SDAO is an excellent example of a consumer of that marketplace’s data. Rooted in the philosophy that DAOs represent that next frontier for private market assets, SDAOs provide real-time, trusted data for assets without the owners relinquishing real control of that data. Instead, SDAOs hand access over to another entity that enhances the reliability and validation of that data. As we explain in more depth in this blog post, SDAOs are member-owned organizations that are managed by accredited institutions like fund administrators. 

Accredited institutions can specify different criteria for Sponsored DAOs such as: 

• Borrower lending criteria 
• Liquidity for assets that are locked in Digital Special Purpose Vehicles 
• Verify Data Validity 
• Maintaining KYC/ AML records 

This type of data given by SDAOs and managed by accredited institutions can inform a wide range of decisions that are required for smart contracts to function properly. 

There is room for more integration between real-time asset performance, data evaluation, and financial oracles. As more private market data is obtained, evaluations by CPAs and auditors can help individuals and entities leverage that data. 

Accumulate Network minimizes the risk involved with trusting a single source of data by adding validity and reliability. It’s not hard to imagine if the owner of an oracle’s data feed posted inaccurate information with the goal to sway smart contracts in favor of a specific decision. To minimize these risks and many others, Accumulate secures private data from several sources, each with its own modifiable share function, to make data available on a case-by-case basis (even on the same ledger). Furthermore, Accumulate ensures that data’s validity by being rooted in identity and key management as a universal, interconnected protocol bridging addresses across Web 2 and Web 3 together.