There aren’t many people in crypto. We’re still on the way to 'onboarding billions'. It’s because it is isolated from the daily applications people use. Crypto systems don’t interact with the apps and platforms where most are.

It's not surprising. Building a fair and open system is part of the crypto vision, and that's orthogonal to how most tech platforms run. They are for the most part incompatible.

The root of this incompatibility is data verifiability. User data in web 2 is not verifiable outside of the context where it was generated. For instance, only LinkedIn can prove your connection with someone. As a user, a screenshot is the best you can do, and that’s light evidence.

The greatest leap for consumer crypto would be building a bridge from web 2 to web 3, introducing verifiability to data from the platforms that people use daily.

Making web 2 data verifiable

This bridge might come in the form of a technology we’ll refer to as web proofs, that leverages a technology called zkTLS. It improves the established Transport Security Layer protocol with zero-knowledge cryptography.

Without ZK, TLS ensures that when a user connects to a website, like their bank account, the connection is secure and authentic. It's like having a private conversation where users can verify they're talking to the real bank. But once that conversation is over, they can't prove to anyone else what the bank told them. It's just their word.

The zk component adds a new capability: you can now prove you were in a private conversation with your bank and what happened in that conversation. It’s like having a notary observe the conversation and issue a certificate saying “this user’s balance is over $10,000” without disclosing the actual amount.

This means developers can now verify web data from trusted sources (like banks, social media, or shopping sites) in a way that's:

• Private: No sensitive information is revealed

• Verifiable: Anyone can check the proof’s authenticity

• Tamper-proof: The proof can't be faked or modified

Companies like Opacity Network and Reclaim Protocol are building tools for developers to leverage these proofs to build better applications. They need to solve hard technical problems, but they progress quickly.

So, what can we build with this technology, assuming we overcome these hurdles in a short amount of time?

In this piece, we will explore three directions:

1. Incentives to target and shape web 2 behaviors

2. Marketplaces for digital assets

3. New oracle types

Using incentives to reward and drive off-chain behaviour

Crypto excels at incentives, mainly through airdrops and rewards. The main innovation is to reward true believers and critical early liquidity with tokens. It helps protocols overcome the cold start problem and turn these users into evangelists because they have skin in the game, all at no upfront cost.

The problem is we're limited to on-chain actions, and the users taking them are a small fraction of the potential audience for many products.

Web proofs could expand airdrop and reward data sources beyond on-chain activity to include the applications and actions we use daily, such as Spotify listens, Robinhood trades, Amazon purchases, and credit card transactions. They widen the scope of eligible actions and enable web 3 builders to reach more users.

I expect the coming months will be full of experiments that reward past behavior and increase crypto adoption, as well as drive future behavior using on-chain incentives.

The most obvious use is to distribute incentives based on web data. For example, by requiring web proof that someone is in the top 10,000 Spotify listeners of the artist, gate concert ticket access. This ensures true fans get access before the general public and scalping bots.

Another low-hanging fruit is airdrops to non-crypto communities. Precedents exist, like PleasrDAO airdropping tokens representing ownership in a one-of-one Wu-Tang Clan Album to $GME holders on Robinhood.

Another important effect is porting reputation across platforms, like the above example of showing a ticketing platform our reputation based on Spotify. Another use case is vampire attacks of web 2 services and marketplaces where reputation is critical, and recreating them to be more competitive. This is what Nosh is doing, building a driver and user owned delivery platform onboarding drivers using the reputation they built on Uber or Lyft.

Interestingly, web proofs are used to the fullest in bringing off-chain data to crypto, but they also break the barriers that tech platform silos create by giving data value outside its original context of creation.

Trading digital objects

Friction and transaction costs are the enemies of marketplaces. A major source of transaction cost is the need to trust your counterparty. Many exist mainly to capture data to build a reputation system for buyers and sellers to establish that trust.

Web proofs and smart contracts can help build a zero-trust system that reduces friction, increasing the velocity and volume of trading on these marketplaces for digital objects like domain names or tickets.

An example is ZKP2P, which created a secondary ticket marketplace. They solved the problem of sellers listing tickets they don’t have, frustrating users who don’t get theirs until the event day, if at all.

In contrast, ZKP2P transactions are nearly instantaneous. Sellers must prove they have the ticket to list it. Buyers send money into an escrow smart contract. To receive the payment, the seller must send the ticket to the buyer, generate a web proof they sent it to the corresponding email, and then instantly retrieve the escrowed amount.

The process from start to finish is much shorter than the current ticket sales lifecycle. This will significantly increase trading volume and improve users' experience.

It's not clear what the most promising verticals for this verified P2P design are. Our mental model is twofold. First, look for spaces with a lot of existing volume and brokers whose primary role is to be an intermediary of trust. Secondaries marketplaces or domain names are examples. The second avenue is looking for transactions that should happen but aren't due to high trust requirements.

We find this design space promising, and it’s a matter of experimenting with different verticals. If you’re building something in the space, we’d love to discuss.

A new kind of oracle

Decentralised protocols rely on oracles to bring external data to crypto. Web proofs affect a) the amount of data we can bring onchain and b) the type of data available to protocol developers.

Web proofs significantly reduce the cost and friction of bringing off-chain data on-chain. They are easier to generate than oracle-attested data, which require multiple independent nodes to provide and validate the data. The data needs to come from multiple sources for accuracy. By contrast, a single user with direct access to the data source can generate web proofs.

These data sources are also harder to shut down than API-based oracles. The APIs used by oracles can be identified and taken down, whereas zkTLS proofs work as long as the user can access the data in their browser. This means most data sources can be put on-chain without the original data controller preventing it.

Web proofs can bring valuable data types that traditional oracles cannot, as they only concern public sources. They can access private user data like personal account information, transaction history, or health records. As an application developer, you have verifiable access to user reputation and history to create new experiences.

This opens new possibilities for applications to combine personal data with crypto infrastructure to build new products, such as:

• DeFi services where risk underwriting leverages data from users’ off-chain financial services like centralised exchanges or bank data

• Onchain insurance for off-chain events such as health data, or employment status

• Social networks where reputation and connections can be verified through existing platforms

• Identity verification systems using multiple data sources for enhanced security, sybil resistance, and privacy.

The future of web proofs

The technology is still early, with important improvements needed in scalability, performance, and robustness to data structure/API changes.

The core idea of making web 2 data verifiable and valuable outside its initial creation context will have important repercussions, from reducing switching costs between applications as users can easily port their reputation to radically new ideas. Think social vampire attacks

The potential applications of web proofs are vast and largely unexplored. As the technology matures, we expect innovative use cases that combine blockchain transparency with abundant web 2 data, leading to great consumer experiences.