Exploring Decentralized Identity (DID)
In this article, we will explore the scope of having a decentralized identity in the web3 world. As we know, the key focus of web3 is centered around ownership and interoperability. The user is the owner of their data. Portability is a possibility. To enable these possibilities, web3 needs a foundational identity layer, and there are more than one way of achieving this. Let’s explore the possibilities here.
Why do we need a decentralized identity?
There are various aspects to having a decentralized identity, and there are multiple solutions relating to them. Let’s look at each aspect turn by turn.
Proof Of Humanity (POH)
The platforms working on POH intend to check for sybil attacks. Think of a sybil attack as multiple fake IDs owned by a single entity. Such platforms concentrate on providing a building block for applications like voting, funding public goods by quadratic votes, proving unique identity, etc.
Here are some examples of projects working on POH: GitcoinDAO, BrightID, Proof Of Humanity DAO, WorldCoin
Personal Profiles
These platforms enable an individual to have a profile to showcase. This profile can be your work portfolio, social identity, bounties you have collected, etc. Basically, the user will be able to project a holistic image of their work/life.
Here are some examples of projects working on personal profiles: LensProtocol, MyMetaProfiles, LVL Protocol, Station, and Badge.
Ownership Mapping
The types of tokens and NFTs an individual holds can speak a ton about him. Ownership mapping platforms track the users’ transactions, assets, etc., and open source this data.
Here are some examples of projects working on ownership mapping: Etherscan, Context, Gallery, and Cyber.
DAO participation
These are platforms for submitting DAO proposals, voting for or against proposals, reputation tracking systems for DAO contributors, and DAO contribution aggregators for users.
Here are some examples of projects working on DAO participation: Tally, Karma, Boardroom, DeepDAO
Problems with DID
Let’s talk about some of the known risks involved in having a decentralized identity on a chain. The first risk that comes to mind is privacy. As we know, all the data on the chain is public and viewable by anyone. This risk can be minimized using instruments like encryption and letting the user choose from a spectrum that ranges from complete privacy to complete transparency. The other problem is adoption. It is difficult to onboard a large number of users to have their identity on-chain, support the architecture needed to do so, and provide sufficient rewards for the users. This might not be a viable ecosystem to sustain, especially when the adoption of web3 itself is in its early days.
Conclusion
Here’s a link to a list of all the projects working in the domain of digital identity: https://web3social.xyz. Adoption remains the biggest deciding factor for any of these platforms to mature. Many of them are in an early stage, many might fail, and there are a lot of unsolved issues on the UX front. True success in the domain of digital identity doesn’t only mean luring the whales or getting a hand full of crypto-natives to use it, but building a platform that contributes to the web3 ecosystem by increasing adoption.
