Decentralized Identity in Web3: Which DID Projects Will Lead the Market in 2024-2025

Why DID Became the Main Trend in the Crypto Industry

A few years ago, decentralized identity seemed like an exotic niche. But the launch of Worldcoin (WLD) — a project associated with the founder of OpenAI — radically changed market perception. The current price of WLD is $0.50 with a daily increase of +0.56%, reflecting renewed investor interest in the digital identity segment.

The essence of DID is simple: instead of various companies and platforms storing your data, you become the owner of your digital identity. It’s not just convenient — it’s a revolution in privacy and data control in the era of blockchain and Web3.

How Decentralized Identity Works and Why It Matters

DID Mechanics: From Theory to Practice

The foundation of DID is blockchain — an immutable ledger where your identity is encrypted and not controlled by any centralized organization. It operates with a pair of cryptographic keys:

• Public Key — your visible identifier, similar to a network address
• Private Key — the key to your digital identity, which should never be shared

This architecture guarantees that only you can verify your identity or authorize transactions, without intermediaries or verifier staff.

Why DID Changes the Rules of the Game in the Cryptocurrency Ecosystem

In DeFi, where everything relies on smart contracts and direct user interactions, verified identity is the trust foundation. DID enables:

• Reducing fraud by linking each transaction to a verified identity
• Maintaining privacy by revealing only necessary information
• Simplifying KYC processes, which are becoming increasingly mandatory for regulators

This creates an ideal balance: regulatory compliance without sacrificing anonymity.

Main Advantages of Decentralized Identity

1. You Own Your Data. Forget about situations where Facebook or Google monetize your information without asking. With DID, you decide who and what to share.

2. One Identity Everywhere. Register on a decentralized exchange, NFT marketplace, or DAO — use the same identifier. No more dozens of different accounts.

3. Cryptography Instead of Officials. No intermediaries, no bureaucracy. Math and blockchain make everything more transparent and secure.

4. Cost Savings on Verification. Companies save on document checks, reducing fraud prevention costs — this efficiency is passed on to users.

Top Decentralized Identity Projects 2024-2025

Worldcoin (WLD): Biometrics as the Trust Foundation

Worldcoin proposed an innovative approach — creating a unique identifier through iris scanning. This guarantees the “one person — one account” principle and fights bots and fraud.

World ID is a decentralized digital identity operating on Ethereum, Optimism, and Polygon networks. Tools for Humanity (the team behind the project) plans to launch World Chain — their own Layer-2 Ethereum network prioritizing human interactions over automated operations.

The company is discussing partnerships with PayPal and is connected with OpenAI, which could expand WLD’s influence in the financial sector and AI sphere.

Current WLD Data:

• Price: $0.50
• 24h Change: +0.56%
• 24h Volume: $1.54M
• Market Cap: $1.29B

Strengths: Innovative biometric approach, inclusivity for the unbanked, global reach.

Challenges: Privacy concerns regarding biometric data, implementation complexity across jurisdictions.

Lifeform: Hyper-Realistic Avatars as Identity

Lifeform occupies a niche in visual DID — creating 3D avatars and integrating them into Web2 social networks. The company has attracted $300 million in valuation and completed Series B funding, led by IDG Capital (, previously having Series A and seed rounds$100M .

Over 3 million unique addresses already use the platform, indicating serious adoption.

Strengths: Advanced encryption and authentication, remote access, optimized UX, hybrid Web3 + Web2 approach.

Challenges: Vulnerability to cyberattacks, requires specialized skills for deployment, potential cross-platform compatibility issues.

$15M Polygon ID: Privacy via Zero-Knowledge Proofs

Polygon ID uses Zero Knowledge Proofs )ZKP### — cryptographic tricks that allow proving something about oneself without revealing details. Passwordless login, secure data exchange, all at the privacy level.

In February 2024, Human Institute announced a partnership with Polygon Labs and Animoca Brands to create Humanity Protocol, which uses palm recognition for security in Web3. In April 2024, Polygon launched a ZKP-based identification protocol.

Strengths: Maximum privacy, scalability, integration with Ethereum/Polygon ecosystem.

Challenges: Relatively new solution, integration difficulties with unprepared systems.

( Ethereum Name Service )ENS###: Human Names for Blockchain

ENS does something brilliantly simple: instead of sending to address 0x742d35Cc6634C0532925a3b844Bc9e7595f42bE, you write alice.eth. This improves Web3 usability.

In February 2024, ENS partnered with GoDaddy to connect ENS names with web domains. In April, they added .box (the first on-chain TLD approved by ICANN) in the manager app.

Strengths: Convenience, broad recognition within the Ethereum community, universal utility.

Challenges: Scalability limitations on Ethereum, potential network congestion.

( Space ID: Single Name for Multiple Blockchains

Space ID allows registering domains that work across different blockchains. One identifier — multiple platforms. Supports crypto trading, lending, NFT minting.

Strengths: Cross-chain functionality, ease of use, versatile application.

Challenges: Competition from other domain services, low adoption outside the crypto community.

) Galxe: Decentralized Credentials for Reputation

Galxe uses on-chain data to create an open infrastructure for Web3 credentials. Credentials are used in reputation systems, access management, and DAO strategies.

Strengths: Innovative data utilization, potential for a wide range of applications.

Challenges: Early stage, limited widespread understanding of the concept.

Main Challenges in Developing DID

Adoption Barrier

Transitioning from traditional verification to DID requires retraining users, updating infrastructure, and legal norms. It’s a long and complex process.

Technical Complexity

Blockchain, cryptography, interoperability between different networks — not simple for the general audience. Technical complexity hampers mass adoption.

Private Key Management

Losing your private key means losing access to your identity. This demands new discipline from users in managing their data.

Regulatory Uncertainty

Each country treats data protection differently ###GDPR, CCPA, etc.###. DIDs must comply with local laws while maintaining decentralization — a delicate balancing act.

How DID Will Evolve in the Coming Years

Mass adoption in DeFi, NFT, and DAO. As awareness grows, DIDs will become the standard for verification in decentralized finance and virtual ecosystems.

Enhanced privacy. Projects will improve ZKP, biometric systems, and encryption methods to defend against cyberattacks.

Cross-chain standardization. DIDs will evolve so that one identifier works everywhere — from Ethereum to Solana, Polygon, and new chains.

KYC/AML via DID. Regulators will realize that DIDs are ideal for identity verification without sacrificing anonymity. This will be a compromise between compliance and privacy.

Beyond crypto boundaries. IoT devices, AI systems, healthcare, government services — wherever reliable identification is needed without centralized storage, DIDs will be applied.

What’s Next?

Decentralized identity is not just a technological trend — it’s a paradigm shift. As people realize the value of controlling their own data, DIDs will transform from an exotic concept into future infrastructure.

Projects like Worldcoin, Lifeform, Polygon ID, ENS, and Space ID are paving the way. The question is not whether the era of decentralized identity will come, but which projects will survive and become the standard.