Among other protocols that make up the Joint Protocol, a verification protocol aims to make trading on the Joint Protocol safer for people.
With the Verification Protocol, users can:
- Get verified for a specific purpose (e.g. KYC, token holder, DAO member, sports team fan).
- Join markets reserved for verified users.
- Create a market reserved for users with one or more verifications.
- Filter markets and liquidity by verification types.
The Verification protocol is made up of several components:
The issuer is an entity granting permission to entities wishing to offer verification badges to Joint Protocol users. The issuer's job is to ensure the quality of verification services that use the Protocol. Initially, Joint Team will act as the issue and eventually delegate the role to the governance system.
The Verifier is an entity that has been granted permission to provide verification services to Joint users. The Verifier must stake some P2P tokens to access the verification protocol. A verifier can provide any verification service, such as KYC/AML verification, asserting that a user holds a token, country verification, age verification and more. Just as the Verifier can grant verification, they will also be able to revoke verification.
The Verified are users or smart contracts that have received verification by any Verifier. Since verification status exists on the blockchain, anyone or contract can freely check that a user or smart contract is verified for a specific verification type. In addition, Joint Protocol Interfaces can also display badges next to users’ addresses indicating what verification type they possess.
Joint Protocol markets can optionally be made verified by configuring the verification type on the following levels:
Verified Liquidity Provider
The market creator limit liquidity provisioning to only users with one or more verification types. For instance, a market can be restricted to only allow users from a specific country, users with a specific token balance, or even KYC-ed users.
Sometimes, a market creator may need to verify that only users who meet a certain standard can swap in a market. In such cases, they can configure the market to allow only mediators with certain verification types to swap.
The mediator role is vital in Joint Protocol; market creators may further protect liquidity providers and swappers by requiring other verification types in combination with the existing security bond requirement. For example, mediators may be required to show prior experience, be KYC verified or have good reviews from an off-chain rating platform.