What problem does Spruce solve? How did Spruce come to be?
Spruce is a digital identity company that reimagines trusted interactions for enterprises and governments. We help our customers create trusted digital ecosystems that reduce transaction costs for business dealings and government services by incorporating real world facts throughout their workflows in a standards-based way. Our products handle statements about an ecosystem’s actors and assets, including certificates, licenses, audit reports, and formal approvals, packaging them digitally so that they are tamper-proof, information minimizing, and traceable within a data supply chain. They can then be shared privately and securely to correctly permissioned parties. To foster transparency and interoperability, we will release our core products as open source.
The Spruce team first worked closely together for a number of years at ConsenSys, where we gained extensive experience collaborating with enterprises and governments on emerging technologies such as digital identity, applied cryptography, cryptoeconomics, and smart contracts. While at ConsenSys, our team won the NYC flagship BigApps competition in 2019 for our approach to solving real estate management for the NYCEDC using digital identity for assets. We also participated in several global digital identity standards bodies and industry groups, and continue to do so today. After our departure, we reflected upon our collective learnings and decided that this was the most important and meaningful problem that we could solve.
Why is decentralized identity important?
We believe that decentralized markets, which transact in a more peer-to-peer way as opposed to through a few (or singular) powerful brokers, have enormous potential to make all participants better off except for rent-seeking centralized actors. It also increases the control and privacy enjoyed by individuals and smaller companies. Many classical economists interpret “free markets” as free from economic rents, compatible with regulatory frameworks and other forms of governance. To enable this shift, trust brokering too must move to a decentralized model.
For the most part, people are comfortable with stepping into Uber cars and Airbnb homes. These brands go great lengths to build trust and credibility, including background checks, million-dollar home guarantees, reputation systems, and online dispute resolution. This is also why people are generally not okay sending a transaction to a random hash address on a publicly-viewable blockchain and then stepping into the next car that pulls up. We think that verifiable information is critical enabling the three pillars of market design, a theory in which the economist Alvin Roth stipulates the necessity of thickness, congestion, and safety across all markets.
To ensure compatibility with peer-to-peer ways to transact, we must also adopt peer-to-peer ways to handle the issuance, transfer, and verification of trusted information. Consider a rideshare driver selling services within a decentralized marketplace who presents a valid license and driving history digitally-signed by the local DMV, proof of insurance from Geico, and a clean background check issued by Checkr (the same company used by Uber), all privately and securely without an intermediary. With this model, we are that much closer to a reality in which the trust portion of transaction costs within a decentralized market are no longer prohibitive, and the platform’s take of the revenue moves from 25% to $0.25. The surplus goes to the consumers and actual service providers.
We therefore think decentralized identity is important because it is beneficial to user control and privacy while also making good business sense. We think decentralized identity is key to enabling a myriad of new configurations for specialization and trade, and we view our open source products as tools for digital market design practitioners who structure markets by improving thickness, congestion, and safety.
What drew you to build on Tezos?
We collaborate with the Tezos ecosystem in two primary ways: (1) we use Tezos as a core dependency and (2) we create public goods for the Tezos ecosystem towards enterprise-ready components around financial assets, government transparency, and other emerging use cases involving trusted information. We don’t have our own blockchain, and we don’t have a token.
We found an excellent alignment between our goals as a company and the Tezos ecosystem. At a high level:
- Tezos’ protocol is upgradeable and has privacy-enhancing primitives on its roadmap for mainnet, core capabilities our customers have asked for to ensure future-proofing and long term sustainability.
- It’s the only ecosystem we found to have the combination of a battle-tested mainnet, active developer community, and smart contracting languages designed to support functional correctness checking using proof assistants. We are focused on use cases which can require high assurance, so this allows us to satisfy such requirements across the whole stack, down to the blockchain protocol level where applicable.
- Its design around on-chain governance pairs well with the notion of machine-readable trust frameworks that underlie decentralized identity systems.
You can read more about this in our blog post which describes our collaboration with the Tezos ecosystem at length.
What three things are you most excited to see built on Tezos?
- We are excited to work with the Tezos community to formalize existing activity as verifiable credentials, including baker statistics and on-chain governance. This will make the ecosystem’s reference data more tamper-proof, traceable, and interoperable towards better accountability. Because Tezos accounts are based on asymmetric keypairs, it is especially straightforward to lift them into decentralized identifier usage. We will leverage these cross-network effects into widespread user-owned credential usage.
- We’re excited to see the next iteration of Better Call Dev which is the most advanced public smart contract explorer we’ve seen across any ecosystem. We imagine it as the first piece in a whole suite of interconnected best-in-class tooling to improve the developer experience, and we expect they’ll experience immediate success when deployed across enterprise environments.
- We look forward to the arrival of BFT consensus algorithms with immediate finality, such as Tenderbake and chronomint to Tezos mainnet, which in our experience are enterprise-friendly and typically only found in permissioned chains. The Tezos protocol has already undergone several successful protocol upgrades, so to us the platform has been derisked significantly.