The KEY token is an Ethereum ERC-20 compliant cryptographic token used for access rights and proof of reputation within the SelfKey Network. The KEY token is a trust mechanism that allows participants to exchange value within the SelfKey Ecosystem.
Trust and reputation are the basic pillars of any identity system and mechanisms should be in place to incentivize good practices and behaviour, and avoid identity fraud, false attestations or misuse of identity data. Using Smart contracts technology, the KEY Token enables such mechanisms to eliminate any potential threat that could jeopardize confidence deposited by participants in the SelfKey Identity System.
Identity Owners are required to place KEY tokens in a locked smart contract, also known as “staking”, to access the network.
The smart contract, automatically releases the staked tokens, once the identity owner decides to leave the SelfKey Ecosystem.
Staking KEY acts as a Sybil-attack prevention mechanism. Sybil attacks occur when a bad actor, creates a number of identities, whether false or stolen, to gain influence in the Ecosystem.
Any bad actor trying to game the network is required to stake a certain amount of KEY for each identity created. Furthermore, once a verifier detects the identity fraud, this bad actor will face a loss, as he will be unable to recover the staked tokens.
Lawyers, notaries, accountants, solicitors, consulates, bank managers, governmental authorities or utility companies, among others, are eligible to be certifiers in the SelfKey Ecosystem.
To be a certifier, an eligible person is required to place certain amount of KEY in a locked smart contract, in the same way as how notaries work in the real world, where a notary has to post a surety bond with the government.
If the certifier makes an incorrect attestation, he would lose the tokens locked in the contract in favour of the relying party who has relied on the proven incorrect attestation.
Bonded notaries allows to give certain weight and value to the attestations, as well as to incentivize good practices and compensate any harm caused to the relying parties.
Furthermore, certifiers provide services under certain terms and conditions established by the SelfKey Foundation. If their behaviour or performance is not according to the terms and conditions agreed, they are at risk to lose their staked tokens.
Once a certifier decides to stop providing services in the ecosystem, his KEY tokens will be automatically returned.
Identity Owners trust relying parties sharing their data and identity documents in order to access their products and services. The KEY Token is used as a mechanism to incentivize relying parties to act in accordance with this trust framework.
Relying parties are required to place KEY in a locked smart contract to offer their services within the SelfKey Marketplace.
If, for instance, a relying party misuses identity data provided by identity owners, it would lose tokens placed in the locked smart contract, which would represent an irrecoverable economic loss.