Gamifying Self-sovereign Identities With Liquid Avatar

I spoke to CEO David Lucatch on their plans to create adoption of self-managed digital identities using blockchain and gamification.

The 3linepitch:

  • Self-sovereign identity (SSI) created using blockchain technology can solve both the data privacy and fake identity issues on the internet.

  • The solution is applicable to anyone who is an internet user.

  • Liquid Avatar encourages adoption through gamification and building a complete service ecosystem around their solution.

In the near future, we will all spend time as an avatar online, exploring virtual reality spaces or playing games. And one startup is looking to build our digital identities for us early in the game.

Liquid Avatar, a company headquartered in Canada, has begun to build the base for a world of virtual personas and self-managed identities (aka self-sovereign identities or SSI) by making its offering attractive to a new generation that’s growing up on online games.

C2B — Turning the tables

Launched on February 18, 2021 on the Apple Store and Google Play, the Liquid Avatar app allows users to create virtual personas of themselves represented by a colorful, cartoonish avatar.

When a user sends their avatar to anyone, the icon will contain more than just a picture of a cartoon character. It carries within it three other layers of information that help the user to manage and share only the information he or she wants to with third party applications.

The public layer carries personal information that the user has preset to share by default, whereas the private data layer carries data he or she is specifically sharing with the recipient. The security layer contains the authentication and encryption information for managing control by the receiver.

By allowing users to control who receives what information about themselves, the goal is for consumers to regain control over the data they generate as internet users. In addition to protecting privacy, users can also potentially receive revenue sharing from third party platforms that want access to their personal data for advertising purposes.

Liquid Avatar allows users to choose from thousands of features for their personal icons and will also allow uploads in the future. It also intends to run an icon creator program and a marketplace for the merchandising and sale of the designs.

Fun — amid serious business

The concept of users centralizing and managing their online identity across multiple platforms with one real, authenticated personal profile arose from two internet trends:

  • Fake accounts created using ‘bots’ or false credentials which advertisers want to avoid.

  • Mounting concerns over privacy issues and the power of big tech on personal data.

David Lucatch, CEO of Liquid Avatar, said that this creates a dilemma for the current advertising based business model that enables the provision of free online services like social media and search engines. Fake accounts and fewer people allowing access to their personal information for targeted online advertising create a squeeze on both ends for platform owners.

But as with any new concept or technology, creating mass adoption is a big challenge. The company’s answer to this is through gamification. They are targeting the new generation of users who grew up on online games and are attracted to the concept of a virtual persona that is both personalized and fun.

“As part of our strategy, we will be actively looking to partner with eSports and game companies so that the Liquid Avatar app and other services offered by the company can be integrated into their platforms,” said RJ Reiser, Chief Business Development Officer of Liquid Avatar.

In addition to their SSI solution, Liquid Avatar also announced a partnership with listed Canadian XTM Inc. to offer users a prepaid Visa card and digital banking services. Another service within the Liquid Avatar network offers a cashback program in partnership with over 370 online merchants in North America.

Obstacles — decentralizing trust

The idea behind SSI startups like Liquid Avatar is to create a technology that empowers users to store and manage their own identity, as well as leverage a decentralized ledger technology like blockchain to enable users to protect their personal data without going through a centralized system that belongs to any one company or government.

The concept is similar to how blockchain enables the decentralized and automated management of bitcoin creation and transactions, except that in this case it isn’t a digital coin that is being created and moved around — it is data about yourself and your online activities.

However, despite the clear logic and value proposition, the fact remains that the concept is new. There are many competitors getting into SSI including big guns like IBM; and convincing consumers to adopt the solution offered by any one entity goes back to the same basic ‘trust’ issue.

(Although companies providing SSI solutions claim that they do not store and access user information , this requires consumers to understand and trust how blockchain technology works — which is sometimes difficult even for folks with a technical background.)

In addition, the success of SSI solutions will mean ‘big tech’ will have to start carving up a share of their advertising revenue to give back to consumers. Surely they will be inclined to fund or create their own SSI solutions to ensure they retain a certain amount of control and benefit from the adoption.

Connected — Stitching it all together

Despite all these challenges, Lucatch and the team from Liquid Avatar aren’t deterred. While recognizing that SSI and its adoption “is a very early-stage market opportunity”, their competitive approach seems to be angling in from all sides of what a virtual persona can do for users.

Mobile wallets and digital banking services, online and offline commercial transactions, entertainment and utility services, providing solutions to private enterprises and government services — Liquid Avatar is connecting it all together through the network of companies and services they are building.

More importantly, through the ability to customize your own virtual persona and gamifying the experience, the company hopes that early adoption will be realized via the gaming crowd — a demographic that is used to the concept of avatars and a permanent online persona.

While adoption for this huge business opportunity that addresses “100% of the online market” may indeed take some time, many players will want to try.

Becoming “The One”

A 2019 study showed that the average internet user spends six hours and 42 minutes of his waking time online. This figure is probably even higher now that the COVID-19 pandemic has forced even greater reliance on the internet for both work and leisure.

At some point most consumers will realize that it does make sense to do away with having to manage many different accounts and privacy settings, and instead switch to one with which they can potentially earn income from the data they create.

The only question is, who will they go with?

The stakes are high and the rewards huge. And Liquid Avatar is betting that appealing to gamers will help them gain an edge.