The Heartbeat of Cardano.

Beyond Transactions: Embedding Identity in Cardano’s Ecosystem

Main Problem: Crypto wallets currently can’t hold SSI (Self Sovereign Identity) data needed for KYC or Anti-Money-Laundering regulations.

Main Applicant: Hristo Koshev


Hristina Bakardzhieva — Project Coordinator
Hristo Koshev — Software Developer/Team Lead
Vladislav Tonev, Ahmet Ahmedov, Alper Aydan — Software Developers
Patricia Toreti — Marketing Specialist
Budget: Requested 380,000 ADA for a 5-month project.

Solution: Develop an SSI wallet toolset, a library, and a Smart Contract that issues a Cardano NFT token representing your DiD (Distributed ID), allowing users to confirm participation in transactions.

Open Source: Yes, the project will be fully open source.


The project focuses on integrating Self Sovereign Identity (SSI) capabilities into crypto wallets on the Cardano blockchain. Traditional crypto wallets cannot manage SSI data essential for KYC and Anti-Money-Laundering standards. By developing an SSI wallet toolset, along with a smart contract to issue a Cardano NFT token representing a user’s DiD (Distributed ID), individuals can confirm their participation in any transaction.

With rising data privacy concerns, there’s a growing demand for platforms where users can control their own identity. By combining SSI with crypto wallets, users have a unified platform to manage both their digital identity and cryptocurrency assets. This not only enhances user experience and security but also aligns with regulatory requirements.

Leveraging the Cardano ecosystem, this initiative resonates with its core principles of decentralization and user empowerment. The potential impact includes giving businesses and users better compliance tools, boosting the Cardano network’s utility and popularity. Outcomes would be gauged by the integration rate of DID/SSI as NFT, its adoption by businesses, and the transaction volume compliant with KYC and AML regulations. Feedback and real-world implementation will serve as key success metrics.

Background on the problem

Digital Identity has always been a challenge in the cyber realm. The conventional methods of authentication and verification, often centralized in nature, have presented myriad security risks, leading to vulnerabilities like data breaches, identity thefts, and more. With the rise of blockchain and decentralized technologies, the concept of a Self-Sovereign Identity (SSI) emerged, promising users complete control over their personal data. Unlike traditional identity systems where third parties govern and control user data, SSI empowers individuals to own, control, and share their identity without the need for an intermediary.

The fundamental promise of blockchain is to provide trust in a trustless environment, making it a perfect backdrop for implementing decentralized identity solutions like SSI. However, there’s a gap in the realization of this promise when it comes to the practical use of SSI in the world of cryptocurrencies. Crypto wallets, the tools that allow individuals to manage their digital assets, are yet to fully integrate SSI functionalities. This gap poses challenges, especially in an era where regulations and compliance standards, such as Know Your Customer (KYC) and Anti-Money Laundering (AML), are becoming increasingly stringent in the crypto sphere.

The described project by Hristo Koshev and his team identifies this very issue: the inability of current crypto wallets to seamlessly incorporate SSI data crucial for regulatory compliance. As cryptocurrencies and blockchain technology inch closer to mainstream adoption, there’s a pressing need for wallets to evolve and be more than just tools for managing digital assets. They need to be platforms where users can seamlessly integrate their decentralized identities, thereby ensuring compliance while retaining control of their personal data. The confluence of SSI and crypto wallets could redefine digital interactions, making them more user-centric, secure, and in harmony with regulatory frameworks.

Moreover, as Cardano remains at the forefront of blockchain innovation, the integration of SSI into its ecosystem becomes paramount. Such an integration doesn’t only represent technological advancement but would also illustrate Cardano’s commitment to user empowerment, security, and regulatory compliance.

The Solution: Bridging SSI with Crypto Wallets on the Cardano Blockchain

The proposed solution by Hristo Koshev’s team is a visionary step towards addressing the confluence of Self-Sovereign Identity (SSI) with crypto wallets, specifically within the Cardano ecosystem. It aims to bring together the strengths of decentralized identity and digital asset management into a unified, seamless experience. Here’s a detailed breakdown:

The SSI Wallet Toolset: At the core of the solution is the creation of an SSI wallet toolset. This includes a library and a Smart Contract on the Cardano blockchain, which will issue an NFT token representing the user’s Distributed ID (DiD). Such a representation is vital, as it merges the world of digital identity with that of non-fungible tokens, offering users a unique, verifiable digital identity that can be seamlessly integrated into crypto transactions.

Enhanced Compliance: The toolset is designed with compliance in mind. By enabling crypto wallets to hold SSI data, users can effortlessly meet KYC and AML regulations, making Cardano-based transactions more secure and compliant. This is pivotal, especially as regulatory bodies worldwide are increasingly focusing on the crypto space.

User Empowerment & Privacy: Beyond compliance, the solution stands as a testament to Cardano’s commitment to user privacy and empowerment. By integrating SSI into crypto wallets, users have granular control over their personal data. They can decide when, how, and with whom to share their data, ensuring that personal information remains in their control, aligning with the principles of decentralized identity.

Applications Beyond Identity: The team’s forward-thinking approach is evident in their broader vision. The solution also lays the groundwork for an invoicing system on Cardano, utilizing the DiD infrastructure to permanently timestamp invoice information on IPFS, a content-addressable storage system. This feature underscores the myriad applications of SSI beyond mere identity, hinting at a future where various traditional digital operations can be decentralized and made more transparent.

Open-Source Commitment: To foster community collaboration, innovation, and transparency, the entire project will be open-sourced. This decision not only amplifies the potential of the solution through collective intelligence but also reinforces the ethos of the decentralized movement.

Integration & Compatibility: Recognizing the vast and varied landscape of crypto wallets, the solution is designed for broad compatibility. The team aims to develop a library to integrate DiD with conventional Cardano crypto wallets, ensuring that the benefits of the solution can be realized by a wide user base without the need for specialized hardware or software.

Implementation Plan: A Step-by-Step Approach to Achieving SSI Integration

Hristo Koshev and his team have meticulously mapped out an implementation plan to ensure the seamless integration of Self-Sovereign Identity (SSI) into Cardano’s crypto wallets. Their approach is systematic, driven by clearly defined milestones and a commitment to rigorous development protocols. Here’s how they plan to bring this innovative solution to fruition:

Sidetree DID Integration:

Duration: 4–5 weeks.
Objective: To integrate their solution with the Sidetree DID mechanism.
Key Tasks: Updating the Cardano-Sidetree clone to the latest Sidetree protocol. Ensuring its compatibility with the Deno environment, allowing for a smooth integration with Cardano’s infrastructure.

DiD Enabled Wallet Development:

Duration: 6–7 weeks.
Objective: To develop a library that merges DID capabilities with standard Cardano crypto wallets.
Key Tasks: Crafting a library that integrates Distributed ID (DiD) functionalities into regular crypto wallets. Developing a Smart Contract that can issue NFTs representing DID, thereby creating a nexus between digital identities and non-fungible tokens on the Cardano platform.

System-level Designs and Third-party Integration:

Duration: 4–5 weeks.
Objective: To design system-level integrations that allow third parties to access encrypted invoices.
Key Tasks: Building upon their proof-of-concept solution for storing and sharing invoice information on the Cardano blockchain, the team will ensure encrypted invoices can be seamlessly accessed by authorized third parties.

Throughout the project, the Project Coordinator, Hristina Bakardzhieva, will ensure effective communication, timely delivery, and adherence to the highest quality standards. The development phases will see hands-on involvement from seasoned developers Vladislav Tonev, Ahmet Ahmedov, and Alper Aydan, under the leadership of Hristo Koshev.

Evaluating Team Capabilities: Can They Deliver?

Hristo Koshev and his team have put forth a promising proposal, aiming to create an SSI wallet toolset on Cardano’s blockchain. Given the complexity and potential implications of such a venture, it is paramount to ensure that the team is competent and capable of bringing this vision to life. Let’s dissect their credentials:

Depth of Experience: The sheer collective IT experience of over 40 years, combined with a focused 10-year stint in crypto and Cardano, signals profound technical wisdom and acumen.

Role Definition and Diverse Skill Set:

  • Hristina Bakardzhieva — With 15 years in managing EU projects, her role as the Project Coordinator is pivotal. Overseeing the project’s progression and ensuring its alignment with milestones shows her vital role in the project’s lifecycle.
  • Hristo Koshev — As the Team Lead and an experienced Blockchain developer, his insights into blockchain solutions position him as the architectural visionary for this project.
  • Software Developers (Vladislav Tonev, Ahmet Ahmedov, Alper Aydan) — Their roles span across software development and data analysis, ensuring the technical facets of the project are well-addressed.
  • Patricia Toreti — Her role in analyzing trends to define marketing strategy speaks to the forward-facing side of the project, ensuring its adoption and relevance in the Cardano ecosystem.

Track Record and Online Presence:

  • The online profiles, such as the LinkedIn links provided, offers transparency about the professional history and credentials of team members. A glance through their profiles reveals their affiliation with Quanterall, a company with a known presence in the blockchain domain.

Open Source Commitment:

  • Their dedication to making the project fully open source emphasizes transparency and community contribution, further solidifying trust in the project’s outcomes.

Dependencies and Collaboration:

  • The team’s clarity on their dependencies, such as their reliance on updated clones of specific repositories and other tools, indicates a well-thought-out plan. It also suggests they’re well-versed with the existing tools and are looking to build upon them.

Further Questions/Interview

I connected with the team and here is what they had to say

Can you explain in a few sentences what the solution is to a non-technical audience?

We are going to build a decentralized application, which will help Small Businesses to store their Invoices on the blockchain, share them with their partners, also potentially give access to those invoices to 3rd parties and finally use them as collateral on the Decentralize Market to take loans against them or pay some other upcoming invoices, so by this way greatly reduce the amount of payments and expenses accompanying Invoice payments.

Given your team’s background, can you explain your experience with Cardano and its smart contracts, and how it has prepared you for this project/Why did you choose Cardano?

I have followed Cardano and its infrastructure building since 2017, but start to take more active participation in it after 2019. I’m a Haskell developer and have been able to participate in the Plutus Pioneer Program with its 1st iteration and follow it since. And I’m convinced that Cardano Blockchain is best suited to be a Small Business Operational System.

My passion for Cardano Blockchain infrastructure and development is shared in my company Quanterall, where I have been given the opportunity to train a small team of people and work on the Proof of concept for Cardano Invoice System.

How does the SSI wallet toolset you’re proposing differ from existing solutions(ATALA PRISM)? What specific needs or gaps in the Cardano ecosystem does it fill?

SSI wallet tools set is the step required for us to be able to take on the bigger goal the Cardano Invoice System, which I explained above.

There are few major differences with ATALA PRISM:
1. We are using Sidetree Protocol to store DIDs information directly on the Cardano Blockchain, where ATALA PRISM has its own blockchain and moreover it’s not Open sourced yet.

2. For the bulk of the information we utilize the IPFS (Inter Planetary File System), which is Peer to Peer decentralized Content Addressable Storage system and therefore we not going to burden the Cardano Blockchain

3. We aim at having a Smart contract to associate DiDs with NFT and the NFT could be used to as guarantee that given transaction has been authorized by the DID owner

You mentioned that the project is dependent on a few GitHub repositories, can you explain the nature of these dependencies and how they will affect the project timeline and deliverables?

Project depends on Sidetree protocol implementation for Cardano, which was funded in the Fund 7 or 8 I think, but was not updated to the latest version of the Sidetree Protocol. We did that and moreover we upgraded that to be runnable on the Deno (a more modern version of NodeJS) environment.

So we are ready with the POC of the solution and need to make this as a library which could be integrated into some of the existing Open Sourced Cardano Lite Wallets, like Nami, Lace etc.

The proposal indicates that your project will use Sidetree protocol. Could you explain why you chose this protocol and what benefits it provides for your solution?

Yes Sidetree is unique as it utilizes both IPFS and Blockchain to store its DID information and do so extremely effectively and it is not Blockchain dependent. So we are planning to integrate Hydra into Sidetree as well and make DID saved on the Cardano extremely light weight.

How does the project plan to handle regulatory requirements such as KYC/AML while also ensuring user privacy and data security?

We are going to address the KYC / AML the same way we address the Invoice information privacy. We are going to encrypt that info on the IPFS and store the references on the Cardano Blockchain as Metadata. It’s going to be NFT issued along this process and verifiers of these credentials would have to be given special permission to access that information.

The project involves storing invoice information on the Cardano blockchain. Could you detail how you will ensure the security and privacy of this sensitive information?

We are going to actual Invoice on the IPFS and keep the CAS address on the blockchain as Metadata. And will encrypt that information with a Public Key stored under owner DID. Therefore Owner of that information will be able to grant access to this information upon request to 3rd parties.

Can you detail your plans for community engagement and how you intend to gather feedback for the project?

With this project we plan to follow the IOG path and publish all the outcomes as Open source and also timely articles about the development process and milestones reached. Also once we shave the SSI wallet integration we will seek the community involvement to be able to integrate it into as many Cardano Wallets as possible.

The project plans to integrate SSI/DID as NFT. Can you elaborate on the potential challenges of this integration and how you plan to address them?

For this we will need to develop a special Smart contract and probably Oracle to be able to validate DID ownership by the party or integrate it directly with the transaction, which is saving the DID metadata on the blockchain and mint the corresponding NFT token. Validation on DID ownership is done via usual nonce signing with one of DID Private Keys.

You outlined a clear timeline for your deliverables. How flexible is this timeline and how will the project adjust to potential delays?

This timeline is according to current team structure and it outline our vision according the current deliverables, as Cardano Blockchain development is not easy picking, we may also seek help from the Cardano developers community as much as we can and we will try to be open on own development process, as much as possible. As long as this is an innovative solution delays are possible, but we are going to try to handle this on the way.

The project’s budget allocation includes a portion for “publicity / marketing plan/ promotion (online advertising)/ community engagement.” Could you provide more details on your marketing strategy and how you plan to promote the project to the broader Cardano community?

Our marketing is going to focus mainly on Small Business all over Europe and try to explain to them the benefits of the project and the Cardano as Public Blockchain.

Do you have a contingency plan if the actual project cost exceeds the estimated budget?

We strongly believe in the potential of this idea and we are going to develop it no matter what happens with Fund 10, but we like to hear the Cardano Community how it sees the proposal.

Finally, how will the outcomes of your project contribute to the wider adoption and usability of Cardano?

We as a team think that this project could bring many Small Businesses to the Cardano ecosystem and give them a glimpse of what an open permissive system could give them as a tool for expanding their business visibility and trust to 3rd party businesses.

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