A Market of Attestation: The Importance of Competition

9 min readApr 28, 2024

Why Attestation Matters

Attestation goes through every aspect of modern society. Verifying facts and establishing information’s trustworthiness is crucial in our day to day life. Notaries confirm document signatures, doctors certify health, universities verify degrees, and social media posts and likes is the proof of social recognition. However, there are no efficient and standard methods to bring these attestation processes on-chain, verifying material facts is still a cumbersome thing to do.

Boosting Commercial Efficiency

The core value of attestation is that it reduces the cost for one party to trust another. It is an efficient way for one party to trust another. For important information, such as proof of assets and credit scores, verification often needs to be completed through third-party authoritative certification. These institutions are often independent and scattered, and cannot easily interface with online applications.

More trust means higher efficiency for the commercial market. For example, when a user is asked to conduct KYC on a website, the user needs to provide his ID, proof of residence and in some cases, proof of finance. These documents are given by trusted parties like DMV(in US), immigration departments, banks, utility companies etc. Although the process of getting these documents is cumbersome most of the time, the web service provider can safely trust this user because the authenticity of the documents uploaded is backed by those publicly known organizations.

Digital Personhood

For day to day users, attestation goes far beyond identity verification. User behavior, assets, social network activities, reputation, etc., can all be verified and managed through attestation. To have a complete online identity, people need a tool that can comprehensively aggregate this attestation information.

Proof of personhood is crucial for:

Fostering proper digital democracy while protecting individual privacy.
Preventing Sybil attacks and ensuring fair distribution of resources.
Enhancing accountability in digital interactions.

Even in the offline world, exchange of information, financial transactions can have malicious sources of origin. A proper attestation of personhood is necessary and many methods have been developed throughout human history.

In the Web3 world, any on-chain data can be considered a trusted source of truth, as long as the hosting blockchain has a large enough user base. The consensus results and asset quantities on the chain are trustworthy, and once proven on the chain, they can be regarded as reliable.

In recent years, we have witnessed many attempts to break down the barriers between off-chain and on-chain applications, aiming to complete verification without compromising privacy. Through this approach, on-chain data can serve as a trusted source of truth without revealing personal privacy information. This opens up new possibilities for the development of various applications in the Web3 world, making interactions between on-chain and off-chain more seamless and secure.

Stabilizing Financial System

Attestation is everywhere in the economical system, however it is not always done properly. Modern world has witnessed reputable institutes failing to provide credible attestations. In some cases, due to misaligned market incentives, some important third-party authorities have experienced serious deviations between their certification results and the true information. The 2008 economic crisis is a typical example, where credit rating agencies, due to competition from peer companies, blindly gave many collateralized debt obligation (CDO) products ratings far exceeding their deserved creditworthiness.

The example above demonstrates the importance of a credible information source to the global financial system. Big corporations conduct business based on the information attested by credible institutes. However, when there is not enough competition among those rating agencies, it turned out to be an economical catastrophe.

According to Friedrich Hayek, a market with higher competition is the market where each service provider tries their best to maintain a good reputation and service quality. The example above shows that even in the modern free market, there has not been a saturated competition. With more attestation service providers competing with each other in the web3 market, the system will gain great transparency, and attestation providers with higher credibility will achieve the public trust over the long term.

In the end, if there is not enough competition among attestation service providers, the concentrated power of several providers will jeopardize the reliability of information on the commercial market. What we can learn from this is that participation in attestation should be barrier-free, and the attestation market should be highly competitive, as a highly competitive attestation market can form a more reliable financial system.

On-Chain Attestation

Blockchain is Naturally the Best Option

Blockchain technology, with its strong consistency and security, is naturally the best instrument for attestation. The development of the web3 industry has created great freedom for attestation. Modern theories of Kate-Zaverucha-Goldberg commitments have granted the industry the theoretical approach for verification without revealing any information.

Attestation on web3 platforms can have great interoperability. Service records and attestable data provided by web3 providers are logged on a blockchain and are persistent. If an attestation service consistently provides inaccurate or false attestation, it will gain less public trust over the long run.

Use Cases

On-chain attestation has various use cases:

Decentralized Identity and Proof of Personhood: Creating a distributed and consistent identity for each user. Projects like Worldcoin and Gitcoin aim at creating a decentralized personhood proof for every user, where each on-chain profile can be mapped to a unique human being.
Real-World Asset Verification: Streamlining property transactions through enhanced transparency. Tokenized RWA benefits from enhanced liquidity. More adoption of on-chain attestation for RWA, means much greater liquidity for those assets.
Oracle Enhancement: Ensuring the trustworthiness of off-chain data supplied to on-chain applications. Chainlink is the most famous on-chain data oracle that acts as a dedicated on-chain attestation data provider. With attestation, it will be much easier for oracles to provide credible source information for on-chain applications.
Privacy-Preserving Social Graphs: Enabling selective sharing and verification of social data. Social data on social networks(X, Meta, Instagram etc.) is not considered critical data but can be a great indicator of a user’s online participation. However on social networks a user might have privacy requirements: he might not want to expose who he is following, or does not want strangers to see some of his posts etc.
Reputation Systems: Building trust through verifiable reviews, endorsements, and credit scores.

In the real world, the information attestation scenarios are quite scattered. Suppose if someone goes to a bank to apply for a mortgage. This person will have to prepare his proof of income, employment status, identity cards, proof of down payment etc. Each of those materials needs to be attested by a notary or an institute. The scatteredness has made the application process quite cumbersome. Web3 is naturally the best option for reducing the redundancy with its strong consistency, security and distributed data availability.

Attestation Market

An attestation market is a marketplace where data providers from different fields and industries, having expertise in verifying certain types of data, compete to provide data services to applications or services that require specific data or have a need for data authenticity and reliability.

Such a market should have no barrier for data providers to participate, in turn, the market will have sufficient competition among all the data providers.

We believe that an effective attestation market should have the following characteristics:

The entry barrier for attestation data providers in an attestation market should be low enough to ensure sufficient competition.
In an attestation market, the credit of attestation data providers should be recorded. Any false information provided should lead to penalties to the provider.
When selecting an attestation data provider, applications should be able to see comprehensive information about the provider.

The mechanism of an attestation market should encourage providers with good credit and penalize data providers with poor data quality and bad credit records.

Attestation Market in Our Vision

Our Proposal for the Infrastructure of Attestation

We envisioned a free market for the future of attestation. In this market, data providers can provide attestation services for users with or aiming to have an on-chain personhood.

Secure data pipelines need to be created for the data providers as well as the consumers. In the attestation market there needs to be:

Attestation passports, which contain attested personal information representing each real individual. Attestation passports contain a portfolio of users’ attested information.
An open attestation service which provides on-chain and off-chain data attestation functionalities. The attestation service should be able to attest about everything, and data providers can create, manage, revoke attestations with this service. Attestations can be processed either publicly or privately.
Record keeper and explorer. In order for the market to be transparent and competitive, we need to have a track record of all participants. When users look for a data provider, they can find a list of vendors and check their track records. Moreover, when a user or a data provider consistently tries to exploit others and not provide any contributions to the community, there should be penalties to the user or the data provider.
Marketplaces. Where users can browse data providers, make comparisons and choose the best data attestation provider they need.

These are the fundamental functions that an attestation market will require. With these functions, users will be able to seek, track and use attested data, and data providers will have the necessary pipeline to serve the community.

Boost Mass Adoption of Credit-Based Services

Attestation will greatly improve the efficiency of the commercial market. With a well designed attestation service, we can practically attest anything and bring commercial activities into the web3 realm. On-chain passports will allow users to truly form identities like how it works in the physical world. By using attestations, users can prove their skills, achievements, and other aspects of their digital lives without revealing sensitive information. Users can also claim ownerships to real world assets with on-chain attested notaries.

In a market with sufficient competition, data providers will naturally try their best to ensure the authenticity of the data. By recording the track record of all participants, we can create more robust systems that are less prone to fraud and manipulation.

On-chain attestation is a powerful tool which can bring massive blockchain adoption of modern commerce. People can attest practically anything, identity, assets, social activities, off-chain data, reputation, oracles, etc. Authentic attestation data can grant users great convenience when exploring new applications. With the attestation infrastructure we envisioned, data vendors can easily participate in the competition of the data market as well. Attestation market will eventually be the gateway for new applications to adopt blockchain technology.

Facilitating the Web3 Path for Commerce

On-Chain attestation has a great potential in shifting modern commerce to a future with the freedom that has never been witnessed before.

By bringing the attestation process onto web3, the economic system is able to operate at a greater efficiency and transparency. The freedom of blockchain technologies can open the gate for more data attestation service providers to enter the market. Users can enjoy the convenience of a greater future. And with more competition among the attestation services, attestation data providers with higher credibility will gain the trust of the public.

High quality attestation data will facilitate the pathway for commercial services to shift their businesses to blockchain. A highly competitive attestation market will encourage more and more businesses to shift to the web3 world.

On-Chain attestation has just started gaining attention. There is definitely a lot of exploration work to do for all of us. At the end of the road we need to have an industrialized standard for all types of attestations. Before that, we have all the freedom to imagine what a fully decentralized commerce would look like, and act.

About TBook

TBook is the incentive layer between commerce and blockchains.

TBook has created a new incentive paradigm through its innovative incentive passport and identity attestation, with a mission towards massive web3 adoption.

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