Applying Zero Knowledge Cryptography in the Mobility Industry
ConsenSys Mesh’s Enterprise ZK Applied Research & Development team focuses on creating new trustless systems using zero-knowledge cryptography (ZKC), self-sovereign identity (SSI), and other emerging Web3 technologies. Recently the team has started studying the mobility space, which has seen $115B of new tech investment over the last decade. While vehicle purchases are trending downward, Mobility-as-a-Service (MaaS) devices, or on-demand services in urban areas, are trending up. As the number of devices used in the industry grows, the need for trusted coordination — (both secure and privacy-preserving) — between these IoT devices and their customers grows too.
ConsenSys Mesh Enterprise ZK and MOBI see an opportunity augmenting the Mobility Space with Web3 Technology
Mobility Open Blockchain Initiative (MOBI) is a global nonprofit smart mobility consortium. MOBI seeks to increase the efficiency, decentralization, and sustainability of transportation. MOBI’s members work to build Web3-based standards and digital infrastructure that support connected ecosystems and IoT commerce.
The UN predicts population growth within large urban areas will increase by 50% by 2050. This growth will put a strain on cities around the globe and contribute to rising pollution, congestion, and inefficient use of existing infrastructure. SSI and ZKC can help combat this by providing new means to coordinate mobility resources and customers. With Self-Sovereign Digital Twins (SSDTs), IoT devices in vehicles and other modes of transport will become identifiable, thus enabling new pay-per-use applications, incentivizing sustainable modes of transportation, and contributing towards building infrastructure for high-use areas that track customer movements in a privacy-preserving way — All aided by zero-knowledge cryptography.
Dealer Floorplan Auditing Use Case
A foundational use case that hinges on the secure communication of IoT devices through zero-knowledge cryptography is dealer floorplan audit automation, as identified by MOBI’s FSSC Working Group.
In order to fill a lot with vehicles for sale, car dealerships commonly take out loans to purchase their sales inventory from the original equipment manufacturer: a practice called floorplan financing. When a floorplan financed vehicle is purchased from the lot, the dealer has a limited number of days to pay back the loan they received for that vehicle.
To ensure that dealer vehicles with outstanding loans are correctly accounted for, lenders employ human auditors to perform what is called dealer floorplan auditing. This practice is intended to verify the number and identity of vehicles on the dealership lot versus the inventory the dealer has reported to the lender. Unfortunately, this requires the physical presence of human auditors at regular intervals to manually verify that inventory status claims are correct.
Not only is this process inefficient, it also results in higher vehicle prices for consumers. Lenders upcharge dealerships to account for the additional cost of keeping tabs on their collateral, which thins the profit margin of vehicle sales for dealerships, ultimately driving up sticker prices for the consumer.
Citopia vinTRAK, MOBI’s pilot project, uses SSDTs and zero-knowledge proofs to identify and verifiably attest correct attributes of vehicles, such as their location or membership to a group of vehicles (i.e. a dealer fleet). Thus offering a solution that a) significantly reduces the number of personnel required for an audit to b) instantly conveys information in a privacy and security-enhancing manner eliminates substantial costs for all parties involved.
ConsenSys Mesh Enterprise ZK Team Contributes Zero Knowledge Service for VinTRAK
While modern IT systems allow for the tracking and tracing of devices, it comes with a big catch — the private information of device users is typically collected and shared with third parties. Given vehicles on dealer lots are filled with sensors that can provide all sorts of data (everything from the vehicle’s condition to its location), automating floorplan auditing should theoretically be simple.
However, there are privacy concerns involved with this data: information tied to a specific floorplan cannot be shared between different lenders, or leaked to third parties. In practice, this means that every dealership has multiple sets of auditors conducting their respective floorplan audits, adding additional layers of inefficiency to an already inefficient system.
In order for these vehicles to be tracked in a privacy-preserving way while automating the human auditing practice, ConsenSys Mesh’s Enterprise ZK team created a zero knowledge circuit to secure sensitive information while still allowing the data’s insights to be usable. Vehicle location, identity (VIN number) and any other relevant details can all be proven and verified at any moment in time with the custom zero knowledge circuit created by the Enterprise ZK team. All of this can be done without revealing any clear text information about a specific vehicle or fleet of vehicles.
The diagram above shows the ZK service architecture to properly obfuscate the sensitive track and trace data from MOBI’s Dealer Floorplan Audit Pilot.
The ZK service receives a request for zk-Proof generation that contains:
- the identifier of the vehicle
- a cryptographic commitment that a specific vehicle belongs to a lender’s loan portfolio from their dealership
- the location of the vehicle dealership
- an agreed-upon geofence for the vehicle dealership, and the geolocation of the vehicle
With the inputs provided, the service generates a zk-proof with the help of a zk Circuit. This process then executes the business logic that allows the proof verifier to verify that a) the cryptographic membership commitment is correct and that b) the vehicle’s location is within the specified geofence for the given dealership location. The zk-proofs generated are known as zk-SNARK proofs which are very small and allow for fast proof verification by an auditor. The only public information required to verify the zk-proof is a small piece of the cryptographic commitment: the dealership location and the geofence. No further information from the vehicles gets revealed — showcasing the privacy-preserving power of zero-knowledge proofs.
Altogether, this technology provides a crucial element needed to enable the automation of dealer floorplan auditing and avoid the complications that arise from handling sensitive information. Using zero-knowledge proofs, collaborative parties can act on insights from private data without exposing that data to potential misuse. Enabling privacy for location data marks the first step toward a series of track-and-trace use cases powered by zero-knowledge cryptography like vehicle maintenance traceability, emissions tracking, and usage-based insurance (learn more here).
As with all of the ConsenSys Mesh R&D team’s work, the Enterprise ZK team has open sourced their zero-knowledge circuit engine for the dealer floorplan audit pilot. The codebase can be found here.
Learn more about the Enterprise ZK R&D team at ConsenSys Mesh here or reach out at firstname.lastname@example.org.
For more on the exciting Web3 innovation in the mobility space check out MOBI here.