Automating Billing & Settlement with the Baseline Protocol

Consensys Mesh
8 min readAug 24, 2023



In today’s rapidly evolving digital business environment, organizations in every sector face the challenge of efficiently managing increasingly complex billing and settlement processes. Historically, these processes were restricted to interactions between two businesses. They were time-consuming, error-prone, and demanded significant manual intervention. However, the situation is now more complex, as digital products have evolved to cater to multiple users simultaneously. These products have extended digital supply chains, and their delivery often involves multiple parties rather than just one. As a result, the billing and settlement of these products must not only be automated but also equipped to handle multi-party transactions.

With the advent of the Baseline Protocol, businesses now have an opportunity to automate and streamline their billing and settlement operations in a multi-party, synchronized fashion. In this article, we will explore how the Baseline Protocol is poised to revolutionize these core business functions through its integration of zero-knowledge technology, zero-trust principles, W3C decentralized identifiers (DIDs), and W3C verifiable credentials. As we will see, the revolutionary features of the Baseline Protocol enable businesses to enhance their efficiency, accuracy, transparency, compliance, and privacy.

Understanding the Baseline Protocol and Its Components

The Baseline Protocol is an open-source initiative combining blockchain technology, zero-knowledge technology, zero-trust principles, and traditional enterprise IT concepts. It establishes a common frame of reference for businesses, allowing them to synchronize their data and business processes. This protocol enables secure and private collaboration between organizations while ensuring data consistency without exposing sensitive information. The Baseline Protocol’s key components of zero-trust, zero-knowledge, decentralized identity and blockchain technology drive its capacity to automate billing and settlement processes across industries. It also addresses the 800-pound gorilla in the room: the Digital Business Trilemma. Before delving into the trilemma, let’s unpack the components of the Baseline Protocol and their relevance to billing and settlement.

Zero-Knowledge Technology and Privacy

One of the significant advantages of the Baseline Protocol is its integration of zero-knowledge technology, specifically zero-knowledge proofs (ZKPs). ZKPs allow information verification without disclosing the data itself — a groundbreaking cryptographic method ensuring both privacy and proof of specific knowledge. In the context of billing and settlement, ZKPs can play a crucial role in protecting sensitive business data and maintaining confidentiality during transactions.

By utilizing zero-knowledge proofs, organizations can securely collaborate on billing and settlement processes without exposing sensitive details to unauthorized parties. This enhances privacy and confidentiality while ensuring accurate verification and validation of transactions. Zero-knowledge technology enables businesses to maintain control over their data while securely interacting with other entities in the network.

Zero-Trust Principles and Security

The Baseline Protocol embraces zero-trust principles to enhance security in billing and settlement processes. Zero trust is a security framework that assumes no implicit trust within the network. Instead, it verifies and validates every request and transaction, regardless of the source. By implementing zero-trust principles, the Baseline Protocol ensures that access controls and authentication mechanisms are consistently enforced, thus reducing the risk of unauthorized access and improving the overall security of billing and settlement operations.

W3C Decentralized Identifiers (DIDs) and W3C Verifiable Credentials

In addition to privacy and security, the Baseline Protocol incorporates decentralized identifiers (DIDs) and verifiable credentials to establish trusted identities and enable secure interactions between entities. DIDs provide a self-sovereign identity framework, ensuring that individuals and organizations have control over their identities without relying on centralized identity management systems. Verifiable credentials, on the other hand, are digital certificates that serve as proof of specific attributes or qualifications issued by trusted parties.

By integrating DIDs and verifiable credentials, the Baseline Protocol enables secure and trusted interactions in billing and settlement processes. Entities can establish their identities and share relevant information securely, thus facilitating accurate verification and validation. This enhances trust among participants and enables seamless collaboration, even in multi-party settlement scenarios.

Enabling Regulatory Compliance

Meeting compliance requirements is a critical aspect of billing and settlement processes, especially in industries where Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations are stringent. With its integration of zero-knowledge technology, zero-trust principles, DIDs, and verifiable credentials, the Baseline Protocol provides a robust framework for ensuring compliance in these areas.

By leveraging zero-knowledge proofs and verifiable credentials, organizations can securely verify customer identities and validate transaction details without exposing sensitive information. For instance, the Baseline Protocol enables accurate compliance with KYC and AML regulations while maintaining privacy and confidentiality. The Baseline Protocol’s secure collaboration framework and adherence to zero-trust principles further contribute to regulatory compliance and reduce the risk of non-compliance and associated penalties.

Understanding the Digital Business Trilemma

To understand how the Baseline Protocol can alleviate constraints placed upon billing and settlement by the digital business trilemma, we first have to unpack the concept itself. The digital business dilemma states that digital business transactions can at most fulfill two of these three characteristics: decentralization, security, and performance. This trilemma suggests an inherent compromise in any digital business setting. For example, centralized systems may provide better performance and security but compromise on decentralization. Conversely, decentralized systems may prioritize decentralization and security but sacrifice performance.

Impact of the Digital Business Trilemma on Billing and Settlement

The digital business trilemma impacts all digital business processes that cross company boundaries. As such, it has a significant impact on billing and settlement processes.

Let’s consider a sample scenario in the finance industry:

A centralized billing and settlement system can provide high performance, ensuring fast and efficient transactions. However, this centralized approach raises security concerns, as a single point of failure or a breach in the system can result in unauthorized access or manipulation of sensitive financial data. On the other hand, a decentralized billing and settlement system can enhance security by distributing data across multiple nodes. However, this may lead to performance challenges due to the need for consensus among the participating nodes, resulting in slower transaction processing.

To address the digital business trilemma in billing and settlement, organizations can leverage the Baseline Protocol. By integrating its key components in automated billing and settlement processes between two or more counterparties, the Baseline Protocol provides a solution that strikes a balance between decentralization, security, and performance. It enables organizations to automate their billing and settlement processes while maintaining data integrity, privacy, and efficiency.

Enabling Multi-Party Zero Trust Under Zero Knowledge

By design, the Baseline Protocol achieves multi-party coordination in a zero-trust under zero-knowledge environment. This ensures the authenticity, integrity, and accuracy of every digital service transaction and its data supply chain. Let’s delve into the three characteristics that enable this coordination:

  • Authenticate and authorize every transaction participant at all times: In a zero-trust under zero-knowledge setting, every participant involved in a transaction is authenticated and authorized to perform the necessary actions in billing and settlements. This ensures that only trusted entities can access and engage in the billing and settlement processes. The Baseline Protocol establishes a secure and trusted identity framework by utilizing decentralized identifiers (DIDs) and verifiable credentials, reducing the risk of unauthorized access or fraudulent activities.
  • Prove and verify the authenticity, integrity, and correctness of every digital service transaction and its data supply chain: The Baseline Protocol utilizes zero-knowledge proofs (ZKPs) to prove the authenticity, integrity, and accuracy of transactions without revealing the underlying data. This cryptographic technique enables parties to validate the transaction details while maintaining privacy and confidentiality. By leveraging zero-knowledge technology, organizations can securely collaborate on billing and settlement processes, thus ensuring accurate verification and validation of transactions.
  • Minimize sensitive data exchange at all times, ideally to zero: In a zero-trust under zero-knowledge environment, the Baseline Protocol minimizes the exchange of sensitive data. It achieves this by utilizing zero-knowledge proofs and verifiable credentials incorporating these proofs, allowing entities to share, validate, and synchronize information without exposing the underlying sensitive data. This approach enhances privacy and confidentiality while ensuring the accuracy and transparency of billing and settlement processes.

By incorporating these characteristics, the Baseline Protocol enables multi-party coordination in a zero-trust, and zero-knowledge environment. This ensures secure, efficient, and trustworthy processes such as billing and settlement operations.

Billing and Settlement Examples Across Industries

After setting a fairly abstract stage, we shall now explore some concrete examples and their value propositions.


In the telecommunications industry, accurate billing and settlement processes are essential for service providers, network operators, and content providers. This is especially true when it comes to revenue assurance, which is a multibillion-dollar-a-year problem. The Baseline Protocol can automate the verification of service usage, ensure accurate billing, and streamline settlement processes. By utilizing the Baseline Protocol’s core components like zero-knowledge technology and verifiable credentials, sensitive customer information (such as call records, data usage, or data circuit reliability) can be securely shared between stakeholders while maintaining privacy, data integrity, and data provenance.

Business Value: By automating billing and settlement processes using the Baseline Protocol, telecom companies can reduce billing errors, enhance transparency, and improve customer satisfaction. Studies have shown that efficient billing processes can result in cost savings across different revenue categories — for example, up to 9% improvement in a company’s recurring revenue.


In the healthcare sector, accurate billing and settlement processes are equally crucial for the industry’s main participants, insurance providers, healthcare providers, and patients. The Baseline Protocol can automate the verification of insurance coverage, streamline claims processing, and subsequently enable accurate billing and settlement similar to the telecom industry. It does this by leveraging the same core components of the Baseline Procol — zero-trust, zero-knowledge, DIDs, verifiable credentials, and blockchains — to securely share sensitive patient data and its multi-origin data supply chain while adhering to privacy regulations.

Business Value: Efficient billing and settlement processes in healthcare can reduce administrative costs and improve revenue cycle management. A study by McKinsey & Company found that optimizing billing management can result in cost savings of more than $100bn annually across US healthcare service providers.

Supply Chain

By its very nature, supply chain management involves multiple stakeholders, including suppliers, manufacturers, distributors and retailers. The Baseline Protocol can automate billing and settlement processes in this industry by using the same approach and core components as in telecommunications and healthcare. This ensures trusted and efficient transactions between the industries key entities. In addition, the components enable the validation and provenance of supply chain data without revealing sensitive information. This enhances trust and reduces the risk of fraud.

Business Value: Streamlining billing and settlement processes in the supply chain can reduce administrative costs, minimize disputes, and enhance overall supply chain efficiency. According to a study by Deloitte, organizations that effectively manage their process automation can achieve cost savings of over 30%.


The Baseline Protocol presents a potentially transformative approach to automating and streamlining billing and settlement processes across industries. This is made possible by the Baseline Protocol’s integration of zero-knowledge technology, zero-trust principles, blockchain technology, decentralized identifiers, and verifiable credentials. By leveraging these components, businesses can enhance efficiency, accuracy, transparency, compliance, and privacy in their core business functions.

The Baseline Protocol’s secure and private collaboration framework enables efficient and accurate billing and settlement, while zero-knowledge technology ensures privacy and confidentiality. Additionally, the integration of DIDs and verifiable credentials strengthens identity management, authentication, and trust within the ecosystem, thus enabling multi-party settlements among different entities.

As organizations start adopting the Baseline Protocol and the technology framework it leverages, the billing and settlement landscape will likely undergo a significant transformation, especially around multi-party arrangements. Automation, efficiency, accuracy, trust, compliance, and privacy become the pillars of these core business functions that drive enhanced productivity, customer satisfaction, and regulatory adherence.

By embracing these innovative solutions, businesses can stay ahead in a rapidly evolving digital business landscape, challenged by regulations and driven by generative AI. With the help of the Baseline Protocol, they can ensure that their billing and settlement processes are optimized for future success.

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Consensys Mesh

Consensys Mesh is an accelerator, incubator, investor, and innovator of blockchain technology solutions since 2015.