How to Design an On-Chain KYC/AML Status Registry

An on-chain KYC/AML registry is a decentralized database, typically implemented as a smart contract, that stores and manages the verification status of user addresses. Its primary function is to provide a single source of truth for compliance checks, allowing DeFi protocols, NFT marketplaces, and other decentralized applications (dApps) to query whether a user has passed identity verification and anti-money laundering screening. This design moves compliance logic from centralized servers to transparent, auditable smart contracts, enabling permissioned DeFi and regulatory interoperability across the ecosystem.

The core architecture revolves around a registry contract that maintains a mapping of address => status. The status is often a uint8 or bytes32 representing levels like UNVERIFIED, VERIFIED, or SUSPENDED. A critical design choice is the verification model: a centralized issuer model uses privileged admin addresses or multi-sig wallets to update statuses, while a decentralized attestation model relies on cryptographic proofs from trusted issuers using standards like EIP-712 Signed Typed Data. For example, a basic mapping in Solidity might look like:

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mapping(address => Status) public kycStatus;
enum Status { None, Pending, Verified, Rejected }

Key considerations for a production-ready registry include upgradeability patterns (like Transparent Proxy or UUPS) to adapt to evolving regulations, efficient gas costs for dApp queries, and privacy preservation. Storing only a status hash or using zero-knowledge proofs (ZKPs) can protect sensitive user data. Furthermore, the registry should emit standardized events (e.g., StatusUpdated(address user, Status newStatus)) so dApps and indexers can track changes off-chain. Integrating with decentralized identifiers (DIDs) or Verifiable Credentials frameworks can create a more portable and user-centric identity layer.

For dApp integration, the registry exposes a simple view function, isVerified(address _user), which returns a boolean. Protocols can then gate sensitive functions behind a modifier:

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modifier onlyVerified(address user) {
    require(kycRegistry.isVerified(user), "KYC required");
    _;
}

This allows for seamless enforcement. However, designers must also plan for status revocation, appeal processes, and cross-chain interoperability using message bridges or layer-2 state channels to ensure the registry remains effective across a multi-chain ecosystem.

Real-world implementations and references include KYCDAO, Quadrata Passport, and the Polygon ID protocol. When designing your registry, prioritize security audits, clear access control rules, and data minimization principles. The goal is to build a system that balances regulatory compliance with the core Web3 tenets of transparency and user sovereignty, creating a foundational primitive for the next generation of compliant decentralized finance.

An on-chain KYC/AML registry is a stateful smart contract system that manages identity verification statuses. The core prerequisite is a deep understanding of Ethereum Virtual Machine (EVM) development using Solidity (v0.8.x+) or Vyper. You must be proficient with development tools like Hardhat or Foundry for testing, deployment, and scripting. Familiarity with ERC-725 (for identity) and ERC-20/ERC-721 (for token-gating) standards is highly recommended, as your registry will likely interact with these interfaces to enforce compliance.

Your system's design hinges on defining the data model. You must decide what constitutes a "status." Common attributes include a unique user identifier (like a bytes32 hash of an off-chain ID), a verification level (e.g., NONE, BASIC, ENHANCED), an expiry timestamp, and the accreditation of the verifying entity. Storing raw Personal Identifiable Information (PII) on-chain is a severe anti-pattern; instead, store only cryptographic commitments (hashes) or zero-knowledge proof verifiers to maintain privacy and minimize on-chain footprint.

A critical requirement is planning for access control and upgradeability. The registry will have highly sensitive functions, such as writing or revoking statuses. You must implement a robust permission system, typically using OpenZeppelin's AccessControl library, to restrict write access to a governance multisig or a whitelist of accredited verifiers. Furthermore, consider using proxy patterns (like UUPS or Transparent Proxies) from the start to allow for future upgrades and bug fixes without losing the registry's historical state, which is non-negotiable for compliance audits.

Off-chain infrastructure is a non-optional prerequisite. You will need a secure backend service (oracle) to: 1) perform the actual KYC checks using third-party providers like Synaps, Fractal, or Persona, 2) sign attestations, and 3) submit transactions to the registry contract. This service must be highly available and secure, often requiring HSM (Hardware Security Module) integration for key management. The on-chain contract will then verify these signed attestations, ensuring only authorized data is recorded.

Finally, you must select and configure the target blockchain network. While a public Ethereum mainnet offers maximum security and decentralization, the gas costs for frequent status updates can be prohibitive. Layer 2 solutions (Optimism, Arbitrum, zkSync) or app-specific chains (using Polygon Supernets or Avalanche Subnets) are often better choices, providing lower costs and higher throughput while maintaining EVM compatibility. Your choice will directly impact your gas budget, user experience, and the trust model of the entire system.

An on-chain KYC/AML registry is a smart contract system that stores and manages verified user compliance statuses. Its core purpose is to allow decentralized applications (dApps) to check if a user has passed a compliance check from a trusted provider, without exposing the user's underlying personal data. This architecture shifts the trust from individual applications to a set of accredited Attestors or Verifiers, who issue cryptographic proofs of compliance. The registry itself does not store sensitive PII (Personally Identifiable Information); instead, it holds a mapping between a user's wallet address and a status attestation, which can be a hash, a signature, or a merkle proof.

The data model centers on a mapping from address to a Status struct. A minimal Solidity implementation might look like this:

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struct KYCStatus {
    address verifier; // Accredited entity that performed the check
    uint256 verifiedAt; // Timestamp of verification
    uint256 expiryTime; // When the status expires
    bytes32 proofHash; // Hash of the verification proof document
}
mapping(address => KYCStatus) public statusOf;

Key fields include the verifier's address for trust attribution, timestamps for validity windows, and a cryptographic proof for verification. Using a hash (proofHash) allows the registry to be a lightweight reference; the full attestation proof can be stored off-chain (e.g., on IPFS or a verifier's server) and presented alongside the on-chain hash for validation.

A critical design choice is between permissioned writability and decentralized attestation. In a permissioned model, only a whitelist of accredited verifiers (managed by an owner or DAO) can call the setStatus function. This ensures data integrity but introduces centralization. An alternative is a schema-based attestation system like Ethereum Attestation Service (EAS) or Verax, where attestations are issued as on-chain or off-chain signed schemas, and the registry contract simply validates these signatures. This separates the issuance logic from the registry storage, promoting interoperability.

Privacy is paramount. Storing raw data on-chain is not advisable. Instead, consider zero-knowledge proofs (ZKPs). A user can generate a ZK proof that they hold a valid, unexpired attestation from a trusted verifier, and then submit only that proof to the registry or a dApp. The registry contract would verify the ZKP using a verifier smart contract. Frameworks like Semaphore or zkSNARKs circuits (e.g., with Circom) enable this. This approach provides the strongest privacy guarantee: the dApp learns only that the user is compliant, not who verified them or any details.

For revocation and expiry, the registry must have mechanisms to invalidate statuses. A simple approach is the expiryTime field, after which a status is considered stale. For immediate revocation (e.g., if a user's credentials are compromised), the verifier can call a revokeStatus function that flips a boolean flag or deletes the entry. More sophisticated systems use revocation registries or bitmaps to efficiently manage revocation lists without bloating the contract storage. Events should be emitted for all status changes (StatusUpdated, StatusRevoked) to enable off-chain indexing and monitoring.

Finally, integrate with dApps via a simple view function. A dApp's smart contract can include a modifier or require statement:

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modifier onlyKYCed(address user) {
    require(
        registry.statusOf(user).expiryTime > block.timestamp &&
        registry.isVerifierTrusted(registry.statusOf(user).verifier),
        "KYC check failed"
    );
    _;
}

This design creates a reusable, auditable, and privacy-conscious foundation for on-chain compliance, enabling DeFi, gaming, and other regulated dApps to implement access controls while respecting user sovereignty over their data.

An on-chain KYC/AML registry is built on a system of attestations—tamper-proof, verifiable statements issued by a trusted entity (the attester) about a subject (e.g., a user's wallet address). The issuance flow is the process by which an attester, after completing off-chain verification, creates and publishes this credential to a blockchain. This step transforms a private verification result into a public, reusable on-chain fact. Popular frameworks for building this include Ethereum Attestation Service (EAS) and Verax, which provide standardized schemas and smart contracts to streamline development.

The technical flow begins when a user submits their identity information to your off-chain verification service. After successful KYC checks, your backend server (the attester) must construct the attestation payload. This payload includes critical data like the recipient's wallet address, a unique identifier for the user, the attestation expiration timestamp, and the specific KYC status level (e.g., Tier1). This data is structured according to a predefined schema, which acts as a data template ensuring all attestations in your registry are consistent and machine-readable.

Next, your attester's secure backend signs this structured data with its private key. This cryptographic signature is crucial, as it proves the attestation originated from your authorized service without exposing the private key on-chain. The signed payload is then sent to a transaction that calls the attest function on the registry's smart contract (e.g., EAS.sol). This transaction records the attestation's UID (Unique Identifier), schema, attester address, recipient address, and the encoded data onto the blockchain, making it permanently available for any other contract or user to verify.

Here is a simplified JavaScript example using the EAS SDK to create an attestation after off-chain verification:

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import { EAS, Offchain, SchemaEncoder } from "@ethereum-attestation-service/eas-sdk";
const eas = new EAS(EASContractAddress);
const schemaEncoder = new SchemaEncoder("bytes32 userId,uint8 kycTier");
const encodedData = schemaEncoder.encodeData([
  { name: "userId", value: userUniqueHash, type: "bytes32" },
  { name: "kycTier", value: 2, type: "uint8" } // e.g., Tier 2
]);
const tx = await eas.attest({
  schema: schemaUID,
  data: {
    recipient: userWalletAddress,
    expirationTime: expirationTimestamp,
    revocable: true,
    data: encodedData,
  },
});

Key design decisions in this flow include setting an expiration time to enforce re-verification cycles and marking the attestation as revocable. Revocability is essential for compliance, allowing the attester to invalidate the credential instantly if a user's status changes (e.g., due to sanctions). The on-chain record does not store raw PII; it only contains pseudonymous identifiers and status codes, linking back to off-chain, encrypted data stores. This pattern balances regulatory requirements with user privacy and blockchain efficiency.

Once issued, this attestation becomes a portable credential. The user's wallet address now carries a verifiable KYC status that can be queried by DeFi protocols, NFT marketplaces, or DAO voting systems using the registry's public getAttestation(uid) function. This completes the issuance flow, creating the fundamental data layer upon which permissioned on-chain applications can be built. The next step involves designing the smart contract logic that other protocols will use to check and enforce these attestations.

A status registry is only as strong as its ability to revoke access. The revocation mechanism is the core logic that allows an authorized administrator—typically a DAO or a multisig wallet representing a compliance body—to invalidate a user's verified status. This is implemented through a function that updates the user's record in the registry's storage, changing their status from VERIFIED to REVOKED. In Solidity, this involves a state-changing transaction that modifies a mapping, such as mapping(address => Status) public userStatus. The function must be protected by an access control modifier like onlyAdmin to prevent unauthorized revocations.

The revocation event must be broadcast on-chain for downstream applications to react. This is achieved by emitting a standardized event, such as event StatusRevoked(address indexed user, uint256 timestamp, string reason). DApps, wallets, and other smart contracts can listen for this event to immediately update their UI or logic, freezing assets or disabling functionalities for the revoked user. For composability, consider adopting an event signature compatible with existing standards like EIP-1497 (Evidence Standard) to include a structured reason or evidence hash, making the action auditable and justifiable.

A critical design decision is whether revocation is global or scoped. A global revocation immediately invalidates the user's status for all integrated protocols, which is stringent but simple. A scoped or role-based revocation allows an admin to revoke specific privileges (e.g., CAN_TRADE but not CAN_STAKE) within the same address. This can be implemented using a bitmap or an array of roles. For example: function revokeRole(address user, bytes32 role) public onlyAdmin. This granularity is essential for DeFi protocols where different actions carry different compliance risks.

To ensure the system is trust-minimized and transparent, the revocation logic should be immutable or upgradable only through a rigorous governance process. The admin keys should be held by a decentralized entity, and the reasons for revocation should be recorded, either on-chain via event logs or referenced via an IPFS hash. Furthermore, consider implementing a timelock on the revocation function for critical roles, giving the community or the user a window to contest the action before it executes, adding a layer of due process to the compliance mechanism.

Finally, the revocation must be efficiently verifiable off-chain. Services like The Graph can index the StatusRevoked events to provide fast queries for frontends. For smart contract verification, the simplest method is a view function: function getStatus(address _user) public view returns (Status). More gas-efficient for contracts is a single SSTORE operation that sets a status flag, which can be read directly via a static call. The chosen method impacts gas costs for both revocation and verification, a key consideration for scalability.

The core of the permissionless query interface is a view function in a smart contract. This function, typically named getStatus or checkKYC, takes an address as input and returns a standardized status struct. This struct should include essential data like a boolean for verification status, a timestamp of the last update, and potentially a level or providerId for tiered KYC systems. The function must be public or external and view to ensure it can be called without a transaction and without consuming gas for the caller, which is critical for scalability and adoption.

For optimal gas efficiency and security, the interface contract should not store the status data itself. Instead, it should act as a facade or adapter that reads from the underlying registry storage. This separation of concerns is vital. The registry, which holds the authoritative state and is updated by permissioned oracles, can be implemented as a separate contract, a module, or even a structured storage pattern like a mapping within the same contract. The query interface simply exposes a clean, read-only API to this data layer.

A robust implementation must handle edge cases gracefully. The function should return a clear default status (e.g., verified: false, timestamp: 0) for addresses not found in the registry, preventing revert errors. For composability with other DeFi protocols, consider implementing the EIP-165 standard for interface detection, allowing other contracts to programmatically verify that your contract supports the KYC query standard. You can also emit a StatusQueried event for off-chain indexing and analytics, though this is not required for the core read functionality.

Here is a simplified Solidity code example illustrating the structure:

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interface IKYCQuery {
    struct Status {
        bool isVerified;
        uint256 verifiedSince;
        uint8 tier; // 0 = not verified, 1-3 = verification tiers
        address verifiedBy; // Oracle or provider address
    }
    function getStatus(address _user) external view returns (Status memory);
}

contract KYCQueryInterface is IKYCQuery {
    // Reference to the actual data storage
    IKYCRegistry public registry;

    constructor(address _registry) {
        registry = IKYCRegistry(_registry);
    }

    function getStatus(address _user) external view override returns (Status memory) {
        return registry._getStatusInternal(_user); // Delegates to internal logic
    }
}

Finally, the deployment and verification of this contract on a block explorer like Etherscan is a crucial step for trustlessness. Anyone should be able to audit the immutable bytecode and confirm that the query logic performs exactly as specified, with no hidden conditions or centralized kill switches. This transparent, permissionless verification point becomes a trust anchor for the entire system, enabling wallets, DEXs, and lending protocols to integrate your KYC status checks with confidence, knowing the logic is publicly verifiable and cannot be altered post-deployment.

An on-chain KYC/AML status registry is a smart contract system that stores cryptographic proofs of a user's compliance status—such as verification level, jurisdiction, and expiry—without storing their personal identifiable information (PII). The core design challenge is balancing regulatory transparency with user privacy. A common pattern uses a merkle tree or a mapping of hashed identifiers (like keccak256(address + salt)) to status structs. The registry contract exposes functions for authorized Attesters (like licensed KYC providers) to issue or revoke statuses, and for Verifiers (like DeFi protocols) to query a status with a provided proof.

Smart contract security is paramount. The registry must implement robust access control, typically using the Ownable or AccessControl pattern from OpenZeppelin, to ensure only approved attesters can update records. Status updates should emit events for full auditability. Consider implementing a timelock for critical functions like changing the attester set. To prevent front-running or status manipulation during a transaction, verifiers should use the require statement to check a status directly within the business logic of their protocol, ensuring the check and the action are atomic.

For privacy, never store raw user data. Instead, the user's unique identifier in the registry should be a commitment, such as commitment = hash(userAddress, salt, nonce). The user provides the salt and proof off-chain to the verifier, who can then reconstruct the commitment to query the contract. Advanced designs use zero-knowledge proofs (ZKPs), where the contract stores a zk-SNARK verifier and a root of a merkle tree of identities. Users generate a ZK proof that they possess a valid credential in the tree, revealing nothing else. This is the model used by protocols like Semaphore for anonymous signaling.

Integration requires careful off-chain components. You need an Attester Service, a secure off-chain server that performs the actual KYC checks, generates the proof or commitment, and submits the transaction to the registry. A Verifier Library (e.g., a JavaScript or Python SDK) is also needed to help applications easily generate proofs for verification and interact with the registry contract. Standards are emerging to ensure interoperability; consider aligning with the W3C Verifiable Credentials data model or the EIP-712 standard for typed structured data signing to provide clear legal semantics for the attestations.

Key design decisions include choosing between permissioned and permissionless attestation, handling status revocation and expiry efficiently, and deciding on data availability. For revocation, you can use a separate revocation registry or an expiry timestamp in the status struct. Gas costs are a major consideration; optimizing storage (using uint8 for status codes, packing variables) is essential. Real-world examples include Circles UBI for identity or BrightID's social graph verification, but a dedicated KYC registry would have stricter attester requirements and more granular status flags to meet Financial Action Task Force (FATF) travel rule recommendations.

Building a functional registry requires moving beyond the prototype. Key next steps include implementing a robust attestation framework like EAS (Ethereum Attestation Service) or Verax to manage credential issuance and revocation. You must also design a secure off-chain verification process, potentially using zero-knowledge proofs via tools like Semaphore or Sismo to protect user privacy while proving KYC status. Finally, establish clear governance mechanisms for the registry's upgradeability and the rules for which verifiers are trusted, likely managed by a DAO or a multi-sig of regulated entities.

For developers, the immediate technical path involves writing and auditing the core KYCRegistry.sol contract, integrating an oracle solution like Chainlink Functions to fetch real-world verification results, and building a front-end dApp for users to request and manage their attestations. Testing should occur on a testnet with simulated verifier addresses. Consider the gas implications of storing statuses on-chain versus storing only attestation pointers, and explore layer-2 solutions like Arbitrum or Base to reduce transaction costs for end-users.

The regulatory and adoption landscape is complex. Engage with legal experts to ensure the design complies with jurisdiction-specific rules like the EU's MiCA or the FATF's Travel Rule. The long-term success of such a registry depends on broad industry adoption; collaborate with DeFi protocols, centralized exchanges, and wallet providers to make the verified status a usable credential. Monitor ongoing projects like Polygon ID, Disco.xyz, and Veramo for evolving standards in decentralized identity, as interoperability will be crucial for the system's utility and resilience.