Creative Economy Enabled by Standards Innovation

Key Takeaways

• Web3 is getting a lot of attention, but its adoption has been hampered by a major UX hurdle: users need to understand the details of the protocols’ infrastructure to interact with applications through their accounts.

• The underlying cause of this is the lack of (identity) middleware standards and the slow and inefficient finalizing process of standards for general-purpose protocols.

• LUKSO is creating a Web3 multiverse network for the creative economy by adopting flexible standards to mediate identity accounts, called universal profiles, and various interactions.

• The flexibility of LUKSO's standards(LSPs) also extends outward to a wide range of existing technologies, not only enhancing the functionality of identity, but also enabling those technologies to be maximally utilized.

• It will be interesting to see how LUKSO grows and how its flexibly designed identity revolutionizes the Web3 space, but it's also very interesting to think about what LUKSO's endeavor itself means for the blockchain ecosystem.

1. Web3 Adoption Needs Web3 Focused Infra

1.1 UX Issues in Web3 Adoption

The adoption of AI technology, which has had a high barrier to entry for decades, was simplified with the advent of GPT, and Meta's Thread service, which provides Twitter-like functionality, onboarded 100 million users in five days thanks to its easy integration with Instagram. In addition, IT services that have adopted a huge user base in the digital space, where there are countless web/app services every day, are characterized by the fact that they constantly try to provide ‘differentiated UX(User Experience)’, such as newer interactions, more convenient functions, or more streamlined processes compared to existing services.

As this phenomenon intensifies, people's baseline expectations for the UX of services in the digital space will continue to rise. From a market perspective, this has significant benefits - services with good UX will have a better chance of survival, which can help improve the quality of the market. However, the flip side of this is that it can also mean that a service's UX can take precedence over the value it was originally intended to provide, meaning that in the worst case scenario, a service can be dismissed for having a bad UX before it is actually used and its value is recognized.

Recently, Web3, which is expected to play a pivotal role in building a balanced creative economy centered on users and creators, has also received a lot of attention from various industries. But in reality, it has not been adopted much due to uncomfortable UX. As such, many Web3 services have tried to solve UX problems by educating users about their services or incorporating various technologies. However, these attempts do not seem to be fundamental enough solutions to match the quality of existing online services.

1.2 Challenges of Current Blockchain Industry

1.2.1 Lack of Identity-Middleware Standards

If so, we need to go back to the ‘what fundamental cause is'. A big part of the UX issues facing Web3 services today is the need for end users to understand the details of the protocol when interacting with the application through their account.

Web2 solves this problem by introducing ‘middleware’ standards - they abstract common features across applications, allowing different applications to focus on its service interface without having to directly access the underlying infrastructure.

Therefore, even in a blockchain-based Web3 context, if the middleware standards associated with account interactions (i.e., identity-middleware standards) can be well established, end-users can minimize their understanding of the back-end logic of the protocol to focus on the value itself provided by the application.

Currently, basic accounts (i.e., EOAs, etc.) in blockchain networks do not fulfill the role of identity-middleware as they cannot contain structurally rich information and lack scalability in interactions.

1.2.2 Inefficiency of General-Purpose Protocols’ Standards

Worse yet, the adoption process of these middleware standards within protocols is inherently slow and inefficient - because most protocols are not created for specific purposes, but rather for a variety of purposes (i.e., general-purpose protocols).

General-purpose protocols must be able to reliably support a large number of different kinds of interactions within a network. So, when a new standard is introduced, it goes through a long and careful review to ensure that it is compatible with existing standards, does not duplicate them, does not conflict with existing conventions, or leaves room for future modifications.

Moreover, as the complexity of the network increases with each new standard, the time spent on these discussions can become increasingly protracted, and the level at which they are implemented is often minimal to avoid conflicts, rather than configured to be flexible and scalable to optimize for specific purposes.

In short, in order to accelerate Web3 adoption while building a more scalable and flexible infrastructure, we should strongly consider 1) the adoption of identity-middleware standards that can define an holistic identity, and 2) the adoption of domain-specific protocols that have a relatively clear value proposition to convey, instead of general-purpose protocols that are reliable but have inefficient and slow processes.

2. LUKSO, Infrastructure Focusing on Creative Economy

Fabian Vogelsteller (familiar to many of us as the proposer of the ERC20 standard), along with Marjorie Hernandez (well known in the creative industries), relate to these limitations of Web3 adoption and presents LUKSO, a ‘Web3 Multiverse Protocol for Building the Creative Economy’.

2.1 Primer on LUKSO

The main idea behind LUKSO is to fork Ethereum's architecture so that it has a stable infrastructure, but the standards on top of it are those that can support an holistic identity and flexible interactions. These can allow for many social creative economy centered on brands, creators, and users can be built in LUKSO ecosystem.

As such, LUKSO essentially adopts PoS consensus algorithm as Ethereum, combining Casper FFG(the Friendly Finality Gadget) and LMD GHOST(Latest Message-Driven Greedy Heaviest Observed SubTree), and the execution client environment is identical to that of Ethereum. However, LUKSO defines that all interactions in the Web3 space are centered around identity, so instead of a restrictive EOA, LUKSO constructs a smart contract-based account called a ‘Universal Profile’ that best represents an individual as the primary identity account. Also, it proposes its own set of standards (LUKSO Standards Proposals (LSP)) to build a UX-friendly interface so that the way universal profiles interact within the ecosystem is flexible and scalable.

Since launching its mainnet in May, LUKSO has been rapidly ramping up its infrastructure, adopting nearly 62k+ validators and a total of 17 LSPs as of September 19th.

2.2 Three Pillars of LUKSO Design

The above three principles provide a more concrete understanding of the future envisioned by LUKSO, which can help us to understand the context behind how each of the LSPs in the following sections are proposed.

2.2.1 Digital Identity - for Every Interaction

LUKSO believes that all behavior in our physical and digital lifestyles is centered around identity. Therefore, LUKSO prioritizes ensuring the creation of an holistic and trustful identity for its users, while acting as a public database accessible to them - users can control, manage, and distribute their own identity data, creatives, or other on-chain activity records through their created identity, and can interact with various services flexibly and extensively through key management.

2.2.2 Virtualisation - for Platform-Agnostic Experience

The ultimate digital identity will be a fully recognizable and highly expressive means of representing an individual, so that it will need to be able to mediate interactions across all platforms. In other words, if an identity is limited to a specific context, it is not being fully utilized - LUKSO aims to provide an immersive digital experience for users, integrating not only web3 and digital spaces, but also the real world. As a result, participating brands or creators can create a supply-side omnichannel where consumers have a consistent branded purchase experience and narrative, regardless of platform or device.

2.2.3 Tokenisation - for Creative Economy Activation

Tokenisation can be defined as the act of creating a community-based economy through the issuance of a new commodity with value. Tokens can be used as a way for community members to express their interest, belonging, or loyalty to a community, and can also be used to align economic incentives between issuers and holders - LUKSO aims to tokenize the value of brands/creators to enhance their own community culture, thereby enabling a transparent creative economy.

2.3 Universal Profile as an Holistic Identity

The main limitations of EOA, which has been used as the default account throughout the protocol, include 1) the difficulty of recovering the account, 2) the inability to freely attach information that can be read by other smart contracts, and 3) the inability to execute diverse logic due to its structure, making interactions limited and not scalable.

In response, LUKSO emphasizes that the identity account at the center of all interactions should be structurally flexible, and proposes a new form of identity account called the 'Universal Profile'* with fully customizable and self-contained properties.

*The universal profile is currently in beta.

Source : universalpage.dev/jay

2.3.1 ERC725-based Smart Contract Account

The universal profile is a smart contract-based account that extends one of the existing Ethereum Improvement Proposals (EIPs), ERC725 - the main idea behind ERC725 is to define identity through the concepts of a generic executor called 'ERC725X' and a universally accessible key-value based storage called 'ERC725Y'. It is very important to understand the architecture of ERC725, as most of the LSPs are proposed to support the flexible interaction of universal profiles.

Source : Docs of Universal Profile

ERC725X - “Flexibility in Execution”

ERC725X aims to embed a variety of OPCODEs to enable newly defined identities to perform a wide range of functions, beyond what existing EOAs can do to interact with another address (i.e., CALL) or create a new smart contract (i.e., CREATE).

To date, the list of OPCODEs that can be implemented on ERC725X includes 1) DELEGATECALL, which executes different contract logic in the context of the caller, 2) CREATE2, which creates a contract in a unique way with a predetermined address, unlike traditional methods (i.e., CREATE), and 3) STATICCALL, which performs a CALL without causing a state change. These OPCODEs can be executed through a method called 'execute' as shown below.

function execute(uint256 operationType, address target, uint256 value, bytes memory data) external payable returns(bytes memory)

• operationType ; The type of task used for execution, where OPCODEs are matched as follows

  • '0' for 'CALL' - triggers Executed event

  • '1' for 'CREATE' - triggers ContractCreated event

  • '2' for 'CREATE2' - triggers ContractCreated event

  • '3' for 'STATICCALL' - triggers Executed event

  • '4' for 'DELEGATECALL' - triggers Executed event

• target ; Addresses to interact with

• value ; Amount of native tokens to transfer

• data ; Calldata or bytecodes of deployed contract

Triggered events(i.e., ContractCreated, Executed) can also be used to execute separate customized logic.

ERC725Y - “Flexibility in Storage”

Unlike existing EOAs, accounts implemented with ERC725 are smart contract-based, meaning they have their own contract storage. Therefore, the data required to express identity or interact with other platforms can be embedded in the account. Furthermore, the way that the data is stored is implemented by standardizing on a key-value mapping structure, so that the data can be stored, referenced, and updated in a flexible way.

function setData(bytes32 dataKey, bytes memory dataValue) external

function getData(bytes32 dataKey) external view returns(bytes memory)

• dataKey ; Key types defined via LSP2*

• value ; Value corresponding to the dataKey

*LSP2 will be covered later in the article.

Source : LUKSO Docs

2.3.2 vs. ENS, Lens Profile, and SBT

In fact, the limitations of EOA have long been recognized. This is not to say that other identity solutions have not been proposed as alternatives to EOA - examples include ENS, Lens Profile, and SBT (Soul-Bound Token). Each of these has been expected to enhance identity by revolutionizing the way individual accounts are represented, or as a means of attesting to certain on-chain activities.

However, at their core, they are all NFTs on the Ethereum network - the limitations of NFT identity are relatively clear, including 1) they must be outsourced to an external registry, which limits the type and amount of metadata that can be attached, and 2) social recovery is quite difficult.

In addition, in the case of ENS, it is necessary to continuously pay a fee every period to maintain its ownership, and in the case of SBT, it is useful to emphasize the position in the community by recording an individual's affiliation, activity history, and qualifications, but these records are dependent on the organization that issues the SBTs, so there are limitations on the owner's ability to independently manage and express his/her information.

In short, if one of the ultimate looks of identity is to have full control over an individual’s information in an easy and flexible way, these solutions cannot represent the full range of roles in identity due to their structural limitations.

2.4 LSPs for Unleashing Different Interactions

The flexible structure of the ERC725 account (LSP0) allows for a wide range of ways for users to interact with each contract - the LSPs we'll discuss below enhance the functionality and UX of accounts and standardize the way each LUKSO netowork's element is represented and interact.

According to LUKSO's documentation, LUKSO categorizes its LSPs into the three categories above (i.e., General Standards, Universal Profile, and Token & NFT2.0). While some of the LSPs within each category may indeed be hierarchical, it may be more helpful to understand the LUKSO network if we consider all LSPs to be in a 'flexible relationship' where they can synergize with each other - for example, LSP0, the primary account on the LUKSO network, consists of ERC165 & 1271, LSP1 & 14 & 17 & 20 in addition to ERC725. LSP0 can also be mixed with LSP3 to form a universal profile that enables interaction with various applications within the LUKSO network, and combined with LSP6 to provide a better UX. Also, LSP3, 4, 5, 10, and 12 are all instances of LSP2.

2.4.1 Generic Standards

General Standards mainly contains standards related to LUKSO smart contracts’ structure, creation and deployment.

LSP1, UniversalReceiver & UniversalReceiver Delegate - “Scalability in User-Action”

• Main Idea : An alarm system for token receipt events on the network, with the ability to apply customized logic via UniversalReceiver Delegate as needed.

• Background : There is no standardized way to be notified when a smart contract receives an ERC20 token.

• Implication : This LSP standardizes how to handle event messages for tokens received, giving users the flexibility to handle custom logic when a token is received without hardcoding the original smart contract account.

Source : LSP1

LSP2, ERC725Y JSON Schema - “Flexibility in Data Management”

• Main Idea : LSP2 describes a key-value-based encoding method for each type of data to be added in contract storage.

• Background : Existing EOAs and smart contracts have structural limitations when it comes to storing and representing data. As a result, there is a need for organized and abstracted storage that allows for more data to be stored in flexible way.

• Implication : This LSP adopts the flexible layout of ERC725Y and standardizes the encoding method for each data key type(i.e., Singleton, Array, Mapping, MappingWithGrouping) so that data can be stored/accessed more systematically.

  

Source : LSP2

LSP14, Ownable2Step Standard - “Safer Ownership Management System”

• Main Idea : LSP14 provides a secure two-step process for transferring/renouncing ownership of a smart contract.

• Background : The existing ERC173 defines a method for owning or controlling a contract, but it is not a secure mechanism as it is executed in a single transaction without any safeguards.

• Implication : The LSP14 standard extends ERC173 to propose the introduction of a two-step process for transferring/renouncing ownership of contracts, ensuring that each contract's ownership change is done securely.

example 1 - The case of transferring ownership

example 2 - The case of renouncing ownership

Source : LSP14

LSP16, Universal Factory - “Multi-Identity in Smart Contracts”

• Main Idea : LSP16 provides a way to deploy the same contract across multiple chains with the same contract address.

• Background : On different blockchain networks using the same VM, a single EOA can have the same control on different chains with the same address, but this is not the case for contracts - for example, a smart contract can exist on Ethereum, but not on AVAX's C-chain, or it can exist under a different name.

• Implication : LSP16 allows contracts to have multi-identity based on the same address, which has UX benefits when users interact with a specific contract or deploy contracts in a multi-chain environment.

Source : LSP16

LSP17, Contract Extension - “Flexibility in Contract’s Extensions”

• Main Idea : LSP17 proposes a structure of upgradable contracts through an Extendable Contract that contains the functionality to be extended, and an Extension Contract that calls Extendable Contract.

• Background : Basically, once a contract is deployed to the blockchain, it cannot be modified to add new functionality or change existing functionality. This means that existing contracts must be redeployed when there are functional updates.

• Implication : This LSP defines an extensible mechanism to allow new functionality to be added/supplemented after a contract has been deployed.

Source : LSP17

LSP20, Call Verification - “Validating Requested Calls”

• Main Idea : When a contract is called, its context is forwarded to Verification Contract, and the Verification Contract returns a result to execute the logic according to a predefined mechanism.

• Background : In order to avoid unintended consequences, smart contracts may need to first verify that a call is valid when received - for example, a DAO may screen each account's reputation score as a way to limit governance rights within the community.

• Implication : LSP20 is responsible for organizing the logic that determines if incoming calls to a contract are valid, thereby maintaining the integrity and security of the smart contract and making it flexible enough to respond to potential changes.

Source : LSP20

LSP23, Linked Contracts Factory - “Remove Circular Dependencies among Contracts”

• Main Idea : This LSP allows contracts with interdependencies to be deployed by temporarily skipping the logic that causes interdependencies between multiple contracts and then enforcing that logic later through a module called 'post-deployment’.

• Background : When deploying two or more contracts, it is sometimes difficult to deploy them at the same time because they require each other's logic (i.e., circular dependency) - for example, the universal profile and Key Manager contracts require each other's addresses when they are deployed.

• Implication : LSP23 adds flexibility to contract deployment by removing the need for concurrently deployed contracts to be independent of each other.

Source : LSP23

2.4.2 Universal Profiles

Universal profiles standard consists of standards for extending the functionality and data management of universal profiles.

LSP0, ERC725 Account - “Blockchain-based Basic Account (without Metadata)”

• Main Idea : LSP0 proposes a framework for a basic smart contract-based account on the LUKSO network, consisting of ERC165 (standard interface detection), ERC1271 (validation of messages and signatures), LSP1 (alert system for specific transactions), LSP14 (secure ownership management system), LSP17 (extensible contract structure), and LSP20 (validation of requested calls) in addition to ERC725.

• Background : Existing EOA has clear limitations to serve as an holistic identity within blockchain networks as it has limited functionality and lacks of flexibility to encompass the data required to define an identity.

• Implication : LSP0 is a standard that serves as the framework for universal profiles, defining identities in a flexible and extensible way to enable a wide range of interactions.

Source : LSP0(ERC725 Account)

LSP3 - Universal Profile Metadata - “Account Description”

• Main Idea : Following the schema format of LSP2, LSP3 define the metadata to be included in a universal profile (e.g., profile image, background, name, tags, and related links).

• Background : LSP0 provides a framework for constructing a universal profile, but does not include metadata that describes the profile.

• Implication : It serves as a key dataset for various applications to recognize profiles for interaction.

Source : LSP3

LSP5 - Received Assets - “Balances Displaying”

• Main Idea : Following the schema format of LSP2, This LSP stores the addresses of the assets owned by the profile within its storage to make it easier to reference balances of them.

• Background : In order for contracts to interact seamlessly with individual identity accounts, balance data of those accounts needs to be listed quickly.

• Implication : Implementing the ability to reference assets on a profile removes the complexity of the process of querying on-chain data and allows for the display of owned balances. This can be used to help initiating a variety of interactions.

Source : LUKSO Medium

LSP6, Key Manager - “Managing Permissions & Transactions”

• Main Idea : Owners can set the range of permissions they allow for each key (or service) in storage within an identity account. Then, when calls are made from each key, the identity account does not interact directly, but instead lets the Key Manager, acting as a gateway, control the calls on its behalf according to the defined permission mapping.

• Background : Accounts defined as LSP0 do not provide such permission management by default. Therefore, this LSP proposes a way to control a profile through a set of keys that are proxy for some of the owner's permissions by introducing a contract called a Key Manager.

• Implication : By introducing Key Manager, users can have a higher level of control when interacting with other profiles or applications, including social login/recovery, key rotation, multisig, relay transactions, etc.

Source : LSP6

LSP9, Vault - “Independent Containers for Secure Interactions”

• Main Idea : Instead of interacting directly with each service, a universal profile allows users to interact through a vault that holds assets or data that they have separately allocated.

• Background : A universal profile can contain many different types of assets and data. Therefore, it is necessary to have a separate safeguard for external interactions in case the account's privileges are compromised.

• Implication : By utilizing a vault connected with their profile, users can keep their assets and data safe - LSP14 can also be utilized so that the vault can be controlled by a specific address.

Source : LSP9

LSP10, Received Vaults - “Vaults Displaying”

• Main Idea : Following the schema format of LSP2, information about the vaults owned by the profile is stored within its storage for easy reference.

• Background : As was the case with LSP5, in order for contracts to seamlessly interact with an individual identity account's vaults, information on the account's vaults needs to be quickly listed.

• Implication : Implementing a way for vault information to be referenced in a profile removes the complexity of the process of querying on-chain data to facilitate the initiation of various interactions.

Source : LSP10

LSP12, Issued Assets - “Assets Identification”

• Main Idea : Following the schema format of LSP2, the information of assets issued by a smart contract can be registered in its storage.

• Background : Currently, there is no standardized way to identify all assets created on a blockchain network. Moreover, the address values of individual assets are a mixture of complex characters, which can lead to users mistaking a fake asset for an original one.

• Implication : LSP12 makes it possible to identify whether a particular asset is issued by the correct user.

Source : LSP12

2.4.3 Tokens & NFT 2.0

The Tokens & NFTs 2.0 standard consists of standards for assets and tokens that can be issued on the LUKSO network. The main differences between these standards compared to existing ERC-based standards are 1) the updatability and richer representation of assets, and 2) the adoption of an optimized structure for interacting with universal profiles.

LSP4, Digital Asset Metadata - “Enabling Multi-Dimensional Representation of Assets”

• Main Idea : Use LSP2's schema to standardize an infinite, customizable metadata structure for digital assets on the LUKSO network.

• Background : Existing ERC-based token standards can only express a limited metadata set (i.e., name, symbol, tokenURI) for their assets. This makes it difficult to identify full context for assets.

• Implication : LSP4 allows for an unlimited list of contextual information needed to identify an asset, and the flexibility of its data structure removes implementation complexity when introducing additional features such as royalties.

Source : LUKSO Docs

LSP7, Digital Asset - “Integrated Asset Standard with Flexibility”

• Main Idea : LSP7 adds various LSPs and parameters for each asset, allowing it to be expressed more richly and interacted with more securely.

• Background : Existing ERC-based token standards have been improved in various ways to enable rich interaction but there are fundamental limitations in metadata representation and inconveniences in the way interactions from each standard are unified.

• Implication : Assets adopting LSP7 can 1) utilize LSP4 to attach unlimited metadata that can describe themselves well regardless of the format, 2) spectrally set the divisibility of assets, so they can handle not only FTs but also NFTs, tickets, and other assets, and 3) embed hooks to trigger safe transfer functions and specific interaction logic through LSP1 and forced bool parameters for more convenient and wide-ranging interactions.

Source : LSP7

LSP8, Identifiable Digital Asset (NFT) - “Integrated Asset Standard with Flexibility & Identifiability”

• Main Idea : LSP8 basically includes most of the features of LSP7, but allows tokenIDs to adopt elements that can better represent NFTs, such as serial numbers, smart contract addresses, and more, so that the uniqueness of NFTs can be better described.

• Background : Current NFT standards, such as ERC721 and ERC1155, simply represent tokenIDs as increments, making it difficult for NFTs to be identified.

• Implication : In addition to the benefits of LSP7, LSP8 provides a way for each collection of NFTs to be better represented - for example, the ID of each collection can be represented as a serial number or smart contract address, which can be used in a variety of ways, including digital twins for physical goods, QR codes on tickets for concert entry, better display of digital creations for licensing, or NPCs implemented as smart contracts.

Source : Universal Page

2.5 Ecosystem

About 4 months after its launch, LUKSO is now home to a variety of projects that can interact with the universal profile and the above LSPs. In particular, we can see projects utilizing LSP7 & 8, as well as projects that are trying to maximize the use of universal profiles by connecting to the real world.

Source : KEEZDAO

2.5.1 NFT2.0, Marketplace

• NFT2.0 projects are NFT projects built using LSP7 & 8, allowing for richer self-expression and interactivity than existing NFT standards. The following projects are experimentally building their own creative communities/economies - Platties, Chill Whales, LuksoPunks, Universal Punx, The Pink Flux

• Universal Page - The project was the winner of LUKSO's hackathon in 2021. It allows users to own individual identity pages by creating a universal profile-based domain in the form of an NFT. There's also a marketplace where users can issue and trade different types of assets, allowing them to create their own NFT2.0 storefront where loyalty schemes are commonplace.

2.5.2 Phygital

• Phygital projects infuse digital properties into objects in the physical world, allowing them to extend their benefits and experiences to virtual/digital spaces - from a business perspective, the potential applications are unmeasurable, including omnichannel marketing, digital twins, and product lifecycle management. It include projects such as FamilyLYX, Dematerialised, MaisonLYX, Metayacht Studios, and Krug Meta.

2.5.3 Social, Metaverse, XR/VR/AR, Multiverse XP

• LOOKSO - LOOKSO is a universal profile-based social media feed that allows users to share messages and interact with other users. It was the winner of a hackathon developed by Dropps, but its link is not available at the moment.

• DWOPE & Metaheads - DWOPE and Metaheads are multiverse/gaming platforms within the LUKSO network, where users can explore each world through their own tokens.

• The District VR - The District VR(TDVR) is a place where users can enjoy parties, DJ shows, performances, and more with real people, artists, DJs, and clubs in virtual reality context.

• Canvasland - Canvasland is a professional player in building Metaverse ecosystem in Hong Kong, supporting NFT consulting, Metaverse adoption, infrastructure tooling and contract development, marketing, community management, etc.

2.5.4 Dev Hub, Tools, Staking, Wallet

• Dropps - Dropps is an infrastructure player that utilizes LUKSO's standards and tooling to create applications and protocols that enable the LUKSO ecosystem to thrive. They are best known for creating LOOKSO, a universal profile-based social media feed.

• WordUP - It is a universal profile-based WordPress login plugin by Luksoverse.

• Stakingverse - Stakingverse is a staking pool service that launched its beta version in July. By participating in the staking pool service, users can earn staking rewards without running their own nodes.

• LYX Tools - LYX Tools provides insights into data such as validator statistics, withdrawal history, fees, rewards, and more.

• Marble - Marble is a native wallet service for LUKSO, created to allow users to easily manage their tokens and safeties based on a universal profile. It was the winner of a hackathon, but its link is not available at the moment.

2.5.5 DAO, Loyalty, News & Docs

• KEEZ - KEEZ aims to be a contribution and reputation-based social DAO for the LUKSO ecosystem. KEEZ also runs blogs and podcasts (i.e., Pinkpill, LUKSOFAM POD) to deliver insights, in-depth discussions, and the latest news about the LUKSO ecosystem.

• In addition to KEEZ, news from the LUKSO ecosystem is actively disseminated through LUKSOFR, The LUKSO Lens, Luksohub, and Luksoverse.

• UPturn - Upturn allows artists, creators, and influencers to create loyalty tokens (social tokens) to share with their community or fan base.

2.5.6 Sustainability

• Candour Digital - Candour Digital aims to connect physical clothes to digital and work with fashion brands, retailers, consumers, and recyclers to make the lifecycle of each clothes circular.

• Greentrade - Greentrade aims to create a transparent carbon credit market by properly tracking data related to carbon emissions around the world. It is currently building a wallet and platform for companies to display their carbon emissions in real-time.

3. Endless Potentials Powered by UP's Flexibility

The flexibility of universal profiles and LSPs allows for richer interactions to be mediated by the user, and we can expect to see the emergence of applications that can provide a much newer and platform-agnostic experience compared to traditional Web3 applications. But the blessings of this flexibility don't end there - universal profiles have the potential to synergize with a variety of existing technologies (i.e., DID & VC, Zero-Knowledge Proofs) to create even more advanced experiences for users.

3.1 Enhancing Identity with DID & VC

In addition to structural limitations, another challenge with the various identity solutions currently being proposed for Web3 is that it is not yet clear how to bridge Web2 and Web3 identities - Identity, by its very nature, is a set of information by which an individual can be identified, and ultimately it should be possible to identify one's presence in any context, allowing for a wide range of interactions.

Moreover, the scope of interaction in Web3 environments and the scope of interaction in the real world are quite independent. Therefore, if an holistic identity can be defined that bridges Web2 and Web3, it can facilitate greater synergy between the real world and Web3 spaces, as well as richer expression of one's identity.

DID(Decentralized Identifier) & VC(Verified Credential) is technology stack or specification for a decentralized implementation of Self-Soverign Identity (SSI) that puts users in control of their own identity information and ensures their privacy. It encompasses the entire digital and physical worlds in which individuals operate. As such, the stack can be applied to a universal profile to which an unlimited amount of data can be attached in any format, allowing various certificates in the real world to be linked into an on-chain identity.

For example, if a trusted organization in the real world has a universal profile and issues certificates with descriptions of certain activities to an individual as a VC on-chain, the individual can then use this VC in the on-chain space to perform complex interactions just like in the real world. Conversely, if various digital activities recorded through the universal profile are also stored in the DID in the form of VCs, they can be used to perform various activities in the real world too.

3.2 Enhancing User Experience with ZK Proof

Universal profiles can also be combined with zero-knowledge proof technology, which has long been discussed as a means of addressing the privacy concerns raised by blockchain transparency, to further enhance the user experience - zero-knowledge proof (ZKP) is a cryptographic technique that allows for the validation of information exchanged without revealing its specifics.

Even though a universal profile can manage various permissions through features such as key management, all on-chain data is publicly available on the network and is therefore not immune to the risk of being exposed or tracked by unintended parties.

If all data and interaction history with universal profile can be protected by ZKP, users will be able to fully customize the permissions they expose to different applications (and even their login information) and have a fully contextualized digital experience without worrying about privacy - this is an whole new user experience that none of the existing platforms have been able to achieve due to privacy issues, and it may potentially lead to new business opportunities in social areas across Web2 and Web3.

In short, the flexibility of the universal profile extends outward to a wide range of technologies, not only to enhance its own identity, but also as a means of ensuring that those technologies are utilized to their fullest potential.

4. Final Thoughts with Implications from LUKSO

So far, we've talked about how LUKSO is building a creative economy that integrates the physical and digital worlds by infusing identity with its extreme flexibility. While it will be interesting to watch or see how such flexibly designed identities revolutionize the Web3 space, it's also interesting to take a step back and think about what LUKSO's endeavor itself means for the blockchain ecosystem.

4.1 (Ethereum’s) Forkability as an Agile Experiments

As mentioned in the introduction, general-purpose protocols that support a wide range of interactions, such as Ethereum, are less likely to adopt standards that focus on specific problems. Therefore, in order to quickly experiment with the various values we expect from Web3, it may be more effective/efficient to build protocols that are optimized for specific problems and allow for agile experimentation, rather than expecting it through general-purpose protocols.

However, building a protocol is also a time-consuming and expensive work. Forking a protocol can be a good way to start this process. Forking Ethereum can be particularly effective, as it has the largest community of any blockchain. Drafts of proposed EIPs from such communities are often very specific about the future we want to potentially achieve with blockchain - in fact, EIPs have historically been highly correlated with developments in the blockchain industry and have been very influential as milestones for various protocols.

So, if you're designing a protocol to solve a specific problem, evolving a suitable EIP, forking Ethereum, and solving the problem quickly may be one way to accelerate adoption or development in the blockchain industry like LUKSO.

4.2 Valuable Example of Protocol Governance

Also, LUKSO's example is significant in terms of protocol governance. Governance refers to the major decision-making processes an organization makes to pursue their vision. Therefore, the protocol's standards, which are determined by governance, should be proposed to be consistent with the protocol's vision and effective in achieving that vision. In this regard, the LSPs proposed to date are very well aligned with LUKSO's vision to build an infrastructure optimized for the creative economy.

Furthermore, the actors that will drive the creative economy include users, creators, brands, and business people from various industries. Therefore, the actors who create LUKSO should be inclusive of all of them rather than limited to developers. The LUKSO ecosystem is now communicating information through various media such as blogs, Twitter, AMAs, and YouTube so that people can easily understand LUKSO’s vision and participate in the LSPs’ creation without a deep technical understanding.

If we define decentralization as ‘an environment that makes it easy for various participants to be onboarded’ rather than simply ‘the number of participants’, then LUKSO's governance is a good example of how decentralized governance can be expressed within the blockchain industry.

Thanks to Kate for designing the graphics for this article.