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This is a Quantitative Study study.

October 23, 2025

Zero-Knowledge Proof-Based Identity Verification in Distributed Financial Networks

Key Points

Identity verification enhances privacy and security in distributed financial networks, reducing data exposure.
The proposed model based on zero-knowledge proofs speeds up verification while ensuring confidentiality and compliance.
Cryptographic methods validate identity claims, supporting financial compliance without trusting a single entity.
This approach highlights a balance achieved between privacy and financial regulations, improving fraud resistance and security.

Abstract

In the context of a growing shift towards DeFi, the challenge of user identity verification while maintaining privacy remains a daunting task. This paper proposes a model for identity verification based on Zero-Knowledge Proofs (ZKPs) tailored for distributed financial contexts. The model implemented uses cryptographic methods to verify identity claims while maintaining the confidentiality of the personal information, achieving a delicate equilibrium between privacy and financial compliance. The privacy-compliant framework increases security while satisfying legal compliance by removing the need to trust a single party and decreasing exposure of personal information and data. The proposed model improves privacy, verification speed, and fraud resistance compared to conventional and baseline systems.

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