notes: events/talks/kericonf26-d2-10-racz-investigating-the-game-of-trust

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events/talks/kericonf26-d2-10-racz-investigating-the-game-of-trust Nicholas Racz: Investigating the Game of Trust (KERIConf 2026) summary v0.1 — 2026-10-15: drafted by Claude from the curated transcript; unread by Mark; marked partner on Mark's word 2026-10-21, paraphrase only, no quotation partner 802 # Nicholas Racz: Investigating the Game of Trust (KERIConf 2026) **Abstract.** Nicholas Racz of Key State Capital gave a field report on six years of investing in companies built on KERI (Key Event Receipt Infrastructure): the firm's investment criteria, its three chosen roots of trust, the stories of Provenant and healthKERI, and the lessons the firm drew. The session was conversational, with frequent contributions from the floor, including Jared Jeffery of healthKERI. It is for readers interested in how the KERI ecosystem has been funded and where investors see gaps. ## Summary Racz opened with the idea that capital brings a believed-in future into the present, and said Key State found Samuel Smith's work after the setbacks of the earlier self-sovereign identity wave. He placed KERI in a sequence of internet protocol layers after TCP/IP, HTTP and TLS (Transport Layer Security), describing it as a public-service protocol for portable, rotatable, self-certifying identifiers. At the start there was a white paper but no infrastructure. Timothy Ruff introduced the firm to Provenant, conceived by Randy Warshaw to bring verifiable communications to SMS (short message service), RCS (rich communication services), calling and voice over IP. He set out three investment tests: an industry vertical a company can own, technical features only KERI makes possible, and the right people. Lacking any one of them, he argued, leads to theory without application, partnerships without shipped integrations, or a good idea that fails. The firm's strategy centers on three roots of trust: the GSMA (the mobile industry association) in telecommunications, DirectTrust and the Vital Initiative in healthcare through healthKERI, and SEDI (State-Endorsed Digital Identity) in Utah, which with the vLEI (verifiable Legal Entity Identifier) covers both organizational and personal identity. He wants portfolio companies that share learnings without competing. On Provenant, he said the firm had expected a quick exit, following the precedent of Credential Master's sale to Salesforce, but instead the company had to break hard ground for six years. Audience members, including a Credential Master co-founder, discussed Provenant's pivots: from telecom to becoming the first QVI (Qualified vLEI Issuer) and back to telecom. Racz said becoming a QVI was needed to win regulators over to the vLEI, and that Provenant built wallets, Java SDKs (software development kits) and what became the Verifiable Voice Protocol used in OVC (Open Verifiable Communications). He cited declining trust in calls and texts, fraud losses, and the limits of X.509-based STIR/SHAKEN. On healthKERI, he said Samuel Smith proposed it with Philip Feairheller as CTO (chief technology officer) and Jared Jeffery as CEO (chief executive officer). Jeffery described two pivots, an industry slow to act on security, and the decision to open source witnesses, watchers and the Locksmith wallet as an invitation to build, while keeping gateways proprietary. A floor discussion followed on open source and intellectual property; one participant proposed that multi-sided protocols must be open source while single-sided products may need patent protection, and others, named Steve and Robert, responded. Racz described healthcare breaches and state-sponsored attacks, then named gaps: wallets in production use, supply chain, where Verifiable.Trade Foundation led by Stephan Wolf works on verifiable bills of lading, and future SEDI initiatives. His lessons were to manage risk as capital tightens, to treat negotiation seriously before contracts are signed, to know and stay in touch with founders, to let visions pivot, and to be patient. In questions he and Will Dahlquist discussed investor hesitations (technical barriers, liquidity, the scope of the problem), and he spoke about exit strategies and liquidity without a sale. ## Key terms trust spanning layer, root of trust, industry adoption, technical development, human talent, canopy shyness, QVI, SEDI, open source, pivot ## Claims and their evidence - Key State Capital has invested in KERI companies for about six years, including Provenant and healthKERI. [presenter-reported] - Provenant pivoted from telecom to operating the first QVI and back to telecom, and built wallets, Java SDKs and the Verifiable Voice Protocol along the way. [presenter-reported] - healthKERI has open sourced its witnesses, watchers and Locksmith wallet while keeping its gateways proprietary. [presenter-reported] - Trust in phone calls and texts is falling and STIR/SHAKEN, built on X.509 certificates, has not solved spam. [presenter-reported] - Supply chain, production wallet use and SEDI initiatives remain gaps the firm wants to fund. [presenter-reported] ## Related Provenant, healthKERI, the GSMA OVC project and the Verifiable Voice Protocol, DirectTrust, the Vital Initiative, SEDI, the vLEI, the Locksmith wallet, Verifiable.Trade Foundation, Credential Master, and Samuel Smith's KERI white paper. Racz referred to an earlier talk of his own at the conference. ## Provenance Drafted by Claude on 2026-10-15 from the curated transcript (d2-10-nicholas-racz-investigating-the-game-of-trust.md), all 43 minutes read. Several floor exchanges, notably one on data loyalty around minutes 16 to 18, are partly inaudible and are omitted. No quotations; paraphrase only. Not yet read by Mark.

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