As Web3 expands its potential beyond finance, Polkadot is aiming to capitalize on the movement. The network recently released a framework to help any geographically targeted group of users distribute, create, and use their digital community tokens.
Named Encointer, Polkadot recently released the platform on Kusama, helping it gain the second common-good parachain slot. Users can find more details about price predictions in the linked article.
Encointer allows brands to distribute their tokens regularly without any cost and government interruption. The process can facilitate local economic activity within communities where users have products and skills to share but lack the funds to trade.
Advertisement
Moreover, since the platform provides an option to pay fees in a token associated with local buying power, it can become the first stepping stone for Web3’s global adoption. However, such systems face common issues, with the primary one being – anyone can join a public, permissionless network.
While it enables pseudonymity and accessibility, if everyone is anonymous, users can join multiple times. Such phenomena can cause disruptions within the community. For example, under such circumstances, someone can receive their digital community token allocation several times under different identities.
That is why building a unique proof of personhood or unique identity system is a severe challenge. Encointer addressed the challenge with a unique approach by stipulating a situation where every individual is willing to prove their identity using a physical key-signing event.
These events are held regularly and are conducted at the same time across the world. It involves a random gathering of users at different locations within the agreed boundaries. The requirement of location and personhood is what makes Encointer secure and unique. The platform makes a Sybil attack impossible to execute.
Advertisement
That is why Polkadot holds ample value proposition in the industry while boosting the Kusama ecosystem too.
