As a privacy-focused blockchain, the Panther Protocol is interested in not only solving the problem of surveillance within the infrastructure of Web 3.0, but also in delivering a tight compliance protocol that is hard to compromise.
The Panther Protocol is an innovative blockchain project that seeks to eliminate a fundamental, industry-wide flaw that is deeply rooted in data privacy. It is further defined on the official website as an interoperable, end-to-end privacy protocol with multiple components, engineered to become the de facto privacy infrastructure of DeFi and Web3.
The project wants to ensure that user data is not compromised while being used by third-party DeFi projects. It thus seeks to help users to negotiate the terms of compliance during onboarding processes such as KYC (Know Your Customer), while also managing their disclosure proof, which is fully or partly signed by end-users.
The Bouncer Analogy
During an exclusive interview with DailyCoin, Oliver Gale, co-founder, and CEO at Panther Protocol used the analogy of a bouncer to explain how their three-tier compliance and disclosure system works.
Gale underlined that, in the existing blockchain landscape, the system already keeps a track record of a user’s details (personal or transactional), and as with a bouncer, the blockchain system already knows pretty much everything about the user.
On the contrary, the same method is not applicable with the Panther Protocol. According to Gale, the decentralized network employs 3-tiers of compliance and data disclosure.
The first tier, which is similar to that which is present in most blockchain systems, requires end-users to disclose all necessary information, while the second tier only requests the specific information that is required for a particular clearance.
There is a third-tier, which is referred to as ‘zero knowledge disclosure,’ where an end-user can actually prove something about a data set without revealing the data itself.
“What if we can prove to the bouncer that I’m able to enter and that I check all of the requirements, without giving him any information. It’s just a green tick box, or a red cross box. So that’s what zero knowledge proofs enable; the ability to prove and verify something about a data set, without revealing the underlying information,”
Unlike anything that has surfaced so far in the implementation of blockchain technology, the zero knowledge proof, according to Gale, uses very advanced cryptography.
To describe how it works, Gale used the analogy of a person facing a locked door, and the ability to gain entrance depends on whether or not the individual has a key to unlock the door. In this way, Gale enthused that there wouldn’t be a need to ask if the person possesses a key or not.
Technically, zero-knowledge compliance, otherwise known as the zero knowledge protocol (ZKP), enables end-users that are registered on the Panther Protocol to gain trust on any blockchain or DeFi project, without having to disclose any personal data, or even participate in onboarding processes.
The decentralized protocol is able to achieve this by leveraging a private, interoperable infrastructure that can interface with other blockchain initiatives such as wallets, decentralized exchanges (DEXs), aggregators, and other DeFi primitives.
Also, going by Panther’s whitepaper, ZKP must first satisfy three major properties, including ‘soundness,’ which implies that if a statement, or provided proof is found false, the verifier will be required to override the verification.
The second, which is ‘completeness,’ implies that if the statement is true, the verifier will accept it, while the third property, ‘zero-knowledge,’ implies that the verifier should not be able to learn any information aside from the truth of the statement.
On The Flipside
- The majority of DeFi protocols are still overly reliant on data disclosure, and as such it is very challenging to avoid consenting to providing your data.
- It may be some time (at least three years) before the zero knowledge compliance system gains major adoption from existing industry players.
Why You Should Care?
Despite the need for transparency, public blockchain tends to compromise end-user data privacy by making it publicly accessible. As a result, early adoption of a platform like the Panther Protocol could have a significant impact on this existing industry-wide problem.
Watch the full interview here: