CONNETOME LIGHTPAPER

v0.1 24/06/2022 v0.2 01/09/2022

Authors: Jakub Siwiec

Introduction

The main problem with blockchain we see is the lack of practical applications except that for entertainment and gambling. It is a fundamental flaw especially when it comes to the financial side of web3 (such as DeFi). The technology has potential, but it is not used yet in the ways that it could be viewed as a competition to the current financial system.

Generally, the financial system is about the redistribution of capital and risk allocation. While web3 products tackle these particular tasks, we believe that they do not solve them better than the traditional financial system yet, especially when it comes to the risk part. Very creative DeFi products do some of the work better than traditional finance products, but because of the high risk, practically on every level (from the counterparty to systemic risk), are not doing it as well overall as they could.

While staying faithful to the values of blockchain, such as decentralization, transparency, privacy, as much permissionlessness as possible, is the key to preserving the community and building sustainable products, not everything will be blockchain and all the innovation is mainly about digitalization of things rather then blockchain itself.

The first half of 2022 showed clearly that not only web3 require changes when it comes to regulations or self-regulation but also that regulators are going to start changing the space with restrictions and laws.

What is connetome?

Connetome name comes from connectome which is a description of the structural connectivity (the physical wiring) of an organism's nervous system. We see it as a map of the connections which makes organisms move, act and think. Such a map does not catch any individual e.g. thought process. This is how we want to build connetome. As you may have noticed the name connetome does not include the letter c on the 6th position of the word connectome. It is because we decided to interpret the number 6 (which is the symbol of human weakness, sin, devil) and letter c as either crime or counterparty risk. That is why we removed the 6th letter c from the word connectome. With that being said, we are not superstitious at all. We just like non-trivial names with some meaning.

The purpose of connetome is to help build more trust in web3 ecosystem, make the parties in a blockchain transaction accountable and provide decentralized projects with a great product that will make them compliant in the eyes of regulators. All of that without giving up the values of web3.

How does connetome works

Connetome does the KYC but in a web3 way. And is used in the web3 either.

Users go through KYC only in one place which is connectome. They do not need to go through KYC again if they want to use another decentralized service such as DEX for the same public key.

Let's take an example of the DEX which wants to comply with the regulatory requirements, e.g. do not approve people from certain countries. When user signs in with their wallet to a decentralized service, it is checked whether the public key using that service went through KYC check with connectome. If they did not, the user is asked to go through the KYC check. If they did, the user is checked against the regulatory requirements of DEX during every transaction. In case of the user failing the meet these requirements, e.g. by being a resident of one of the countries from the forbidden list, the user cannot transact on that DEX. With that DEX can prove to the regulator that they meet regulatory requirements. The responsibility for the correct regulatory check is on connectome. There is no moment when private personal data is being given to the DEX. What DEX sees is only the message of the user being approved or not.

Now, imagine the scenario in which one of the DEX users breaks the rules of DEX, scam other users and steal their money. In order to take part in the transactions on DEX this user needed to go connectome KYC process. The DEX wants to get the personal data of the user to hold that user accountable and get money back for scammed people. The DEX sends the claim to connectome through a dashboard showing which public key stole the money from people and describe the situation. The claim is received by DAO of approved institutions which decides whether releasing the personal data of an accused person is reasonable. If yes, another DAO of other approved institutions received the order to release the personal data to the DEX. The personal information is sent directly to the DEX. Once the DEX receives the personal data of the person, they can start appropriate procedures in the traditional legal system. At the same time, the person whose data was sent to the DEX can sign into connectome dashboard and see the log from that event.

More details

Check more details on how connetome works in the chapter Solution in our whitepaper.