Litentry – Hidden Coin, Needs to Add Your Wallet
As an identity aggregator, Litentry offers some new possibilities for blockchain projects.
Whenever I’m on the lookout for altcoin gems with smaller caps. I look for a number of things that together enhance the chances that the pig is going to be a bargain.
A project that meets these criteria includes solving an urgent problem, being the first to do it, and being built in a less saturated ecosystem with a well-developed token. Litentry (LIT) is a project that meets all of these criteria.
Litentry is best understood when you understand the problem it is trying to solve. Decentralized identity management is simply the solution to this problem.
On a decentralized blockchain, how can unique identities be attached to certain users? What are the best ways to verify that it is a unique individual who controls the wallet address we are dealing with? Are you able to identify the person now?
When identities cannot be attached to addresses, DeFi’s potential is limited.
What are the best ways to handle things like lending and credit delegation, for example? You can borrow money now and get a DeFi. However, these loans have all been heavily overcollateralized.
To my knowledge, there are currently no DeFi standards that provide lending functionality for loans under 140% collateralization. There is a one really simple reason for this. The person you lend money to does not know you.
Can’t verify the borrower’s DeFi credit record if they don’t repay the loan. In light of that, it makes sense that you would ask for more collateral than they ask for the loan.
For the delegation of credit, I’m not going to be able to do that unless I know who the hell I’m dealing with. Daft is not the word for it. Without identity attribution, this is one of the problems.
Governance decentralization is another issue.
Presently, Proof of State (PoS) blockchains use a governance model in which token ownership determines the strength of a member’s voice.
There is a possibility that you think the governance system is decentralized since there are several different wallets. There is no way for you to determine whether people controlling those wallets are a small group of people.
Considering that we know that centralization could lead to a conflict of interest in voting systems, there is of course a risk here. When one cannot adequately determine how decentralized a protocol really is, this is only one of the potential issues one could face.
Consider the case where a project wants to issue a unique airdrop to everyone viewing their network. The DeFi space has seen a number of examples of this, including Uniwap and 1inch.
However, they’ve done it so that unique addresses, not unique identities, have been used to drop these tokens. So here’s the deal: this means, for the most part, that you used either of these protocols if you held more than one address.
All of you received the airdrop to multiple addresses. My experience is of course relevant here. In spite of this, I am not obligated to pay no matter what the rules are.
The rules may now be abused by some. However, users would have been able to receive the airdrop only if Uniswap had been able to identify them.
Identifying identities on-chain has many benefits. These are only some of them. Litentry fills that exact need.
What is Litentry?
Litentry implements identifier management and aggregation platform that’s flexible enough to integrate with multiple blockchains. A platform for project and protocol management and the use of DIDs in new and exciting ways.
But that’s not the most important point. In a moment I’ll discuss how Litentry is developing a mechanism so these DIDs can be securely used privately.
When it comes to building Litentry on an underlying network. What it is is a decentralized blockchain building framework.
Efficacious and can be built upon easily. The substrate is natively compatible with Polkadot, which is one of the most exciting aspects of using it.
So it could potentially form part of Polkadot someday. There are immense benefits to this.
In light of Ethereum 2.0’s upcoming release, things are unlikely to improve until Ethereum 2.0 is released.
Polkadot’s unique consensus mechanism will allow it to scale much more than Ethereum. In addition, Polkadot’s unique parachain architecture makes its DApps interoperable with one another.
In addition to blockchain, they are applicable to several other ecosystems and blockchains as well.
Polkadot is of course much more than this list can possibly encompass. You should read the article, so I encourage you to do so. You can read about it in my blog post linked below from last year.
Nonetheless, what matters is what Litentry can do with this. It is capable of managing identity across chain connections. Polkadot ecosystems are not limited to merely Polkadot. Litentry’s DID system is compatible with DApps built on Ethereum, Cosmos, and Filecoin.
You might be surprised to know that DApps like AAVE, Compound, and UniSwap could leverage Litentry cross-chain identity services. By backstopping the credit for someone else on the AAVE platform, someone would basically stand behind their credit and be responsible for the rest.
However, these users’ identities and credit records cannot be verified natively since there is no way of doing so. Smart contracts had to be used for this task. To that end, if they could utilize Litentry. We could do this on-chain and seamlessly.
The counterparty’s credit record can be verified instantly, privately, and securely. What is Litentry, and how does it work?
How it Works
I would like to discuss Litentry architecture at a high level. The best way to describe it is with this infographic. Be confident about it now.
We’ll start with the user side of the app, and Litentry is the most important component of the technology. Users of the app will be able to participate in the governance process and access Identity-Based Services through the Litentry Network.
It is also possible to link the app to other social networks and even to older identity verification systems such as LinkedIn, etc.
It can also be used as a wallet for cryptocurrency and for managing LIT incentives. As part of the app, Litentry will be integrated. This is a hub for the Web 3.0 ecosystem regarding mobile identity and data.
Here’s the first proposal of the app you can see in their documentation to get an idea of what it looks like.
There is also a dedicated GitHub report for the app that you can check out. Currently, you can test out some features on Litentry via their depth playground, which is pretty neat.
The hub is basically a collection of Litentry-based decentralized web applications. A two-factor authentication (2FA) demonstration is demonstrated there.
This is a really cool app. There’s no need to register or enter a password to use it just to get an idea of the technology’s capabilities. Here are the features available to users. It’s the developer site where the hardcore technology is developed.
First of all, it’s called Litentry Network. The substrate is used for this, and this is among the most well-known frameworks. Byzantine consensus mechanisms are among the most robust and efficient available today.
By using an account’s unique identifier, the Litentry runtime protocol will be able to link it across other chains.
An individual on Litentry can affix a private key to their unique identity to sign transactions. Thus, it is possible to share user data privately while still keeping the information secure.
Users themselves are not shared except for their unique identifiers. Using these identifiers can also be used to verify information relevant to credit delegation etc.
This publication cannot go into the specifics of how the Litentry network works. You can check out the docks by clicking on the link below
This substrate architecture has a great deal of potential to become an option for the Polkadot ecosystem once it is upgraded. The software development kit is another piece of Litentry’s tech stack.
The Litentry whitepaper also mentions that they plan to add more languages to these SDKs, and their Light Client Services are one final component of their architecture.
Litentry mobile applications are free from external servers thanks to these services. This is more technically correct to say that these apps can access the Litentry blockchain directly, without relying on any single node.
The decentralization and trust benefits are, of course, a bonus. This protects clients from receiving false information from malicious nodes.
Those are a few details about Litentry’s architecture. If you wish to delve deeper into this, please take a look at the docs. Litentry’s ecosystem and network are essential. That token is LIT. Let’s examine that.
The LIT Token
In the Litentry Network, Litentry serves various functions.
For starters, fees are paid with it. The network will charge its users several different fees. There are also transaction fees that protect against spamming, which are paid to Identity stagers by applications. Identity guardians are responsible for validating staking identities and ensuring the data is ordered into an acceptable format after they verify staking identities.
Thus, fees generated on the network are the utility. Staking is also done with LIT tokens. An identity registrar is a third party that creates indexed identity databases.
The decentralized identifiers are then retrieved from these databases. These registrars need to be able to see their own results. Money is an incentive and it is also a disincentive. They will lose or slash their stakes if they act dishonestly.
By providing these services, they will receive rewards as well. Litentry is used to reward the stagers for blocks.
LIT will also have economic value within a DeFi ecosystem, so I should make note of that as well. A collateral loan may also be available.
Those with access to Litentry’s identity verifier can, for example, use Litentry as collateral for lending a crypto token. There you have another example of utility.
Additionally, as is the case with the majority of DeFi protocols, it will be used in the new protocol’s decentralized governance. This will determine how much power individual members have on the network.
They may also decide whether to remove any dishonest guardians or whether to add functionality to their work. LIT tokens can also be used as a grant by the Litentry team to developers who build on the platform.
That would be a way to provide incentives. Since these developers have received a share of the network, it is natural that they should be rewarded. These rewards will be earned by them.
Litentry’s token has developed quite a few use cases over the years. In my experience, there are few projects that have built a comprehensive ecosystem around their tokens at this stage of development. Nevertheless, his long-term potential needs to be understood through tokenomics.
In the beginning, let’s start with distributing the tokens. In total, there is 100 million LIT available.
According to the following, the tokens were split;
. The Litentry team received 15%, and the seed investors received 8%
. 12 % going to private sales, plus further sales
. The foundation will receive 17% as grants
. Binance launches all tokens at 3% A 40.5% network incentive will remain as part of the chain auction system.
In other words, I believe this is a reasonable initial distribution. This allocation would fall under the broader network incentives bucket, which encompasses the launch pool. The community will eventually receive 65% of the code.
It is important to determine, however, how token unlock schedules could be a potential supply headwind from an investment perspective. There is no doubt that customers are worried about initial sales being thrown on the market.
Let’s take a look at the LIT token release schedule. Based on this release, the unlocked periods remain steady every quarter.
The availability of material is not significant enough to flood the market.
The Binance launch pool released 3% of its supply that is circulating already.
Block reward inflation and parachain auctions will not begin until November 2025.
Block rewards will begin once the stake on the network begins. This will determine the rate of inflation. The target participation rate for the network is 70%, implying a 5% growth rate.
The Proof of Stake blockchain is quite mild in comparison. It will therefore not face either saturation of supply or inflationary effects. The long-term outlook is positive.
Obviously, price is also affected by supply and demand, and I happen to think that Litentry is going to have quite strong demand. Where did I get this idea from?
According to protocol design, as more users use the network, there will be more demand for the token as its utility increases. More and more people are using their steak identities to pay for computations and to secure loans.
Litentry is not comparable to any other open-source project, as I mentioned. As a result, these decentralized identity services will find extensive demand in the DeFi space once they are eventually launched. I can only think of one logical way out of that.
LIT Coin Potential
Additionally, demand for investment must be considered. The tier-one exchange listing for LIT has already proven to be a major milestone. With Litentry coming out of the launch pool and the token commencing trading, the volume along with the price took off like a rocket.
Organizing Litentry was very popular and I believe that this will gain momentum in the future. Several factors contribute to this. There are several things you need to know about this project. The first will be that it will be released as a parachain on Polkadot.
It is easy to see how much-untapped demand there is from Polkadot-based projects.
The feeling is that Polkadot-based DeFi tokens are poised for a similar appreciation to those.
In 2020, Ethereum demonstrated this phenomenon. The point is not whether you believe that or not, but rather that the market believes prices are likely to pick up, and, lastly, the fact that Litentry originated in Asia is also important to mention.
Team members are from China, and the Web 3 Foundation is the only VC company between them and the team.
Litentry’s community is as such large in countries such as China and Vietnam. Blockchain and crypto investments are more popular in these regions than in the west.
Litentry will be available once it is launched. Purchasing tokens in this region may result in an immense frenzy.
I‘m not a financial advisor and this article is simply for educational purposes. It should not be used to make any decisions regarding your finances. If you need investment advice, please contact a qualified financial advisor.
Previous Post: Kusama Coin