Modern solutions for decentralized identifier (DID): which projects should you focus on in 2024

Introduction to the World of Decentralized Identifiers

The Web3 revolution has brought new approaches to managing personal data, and one of the most promising technologies is the (decentralized identifier). When Sem Altman, the head of OpenAI, introduced Worldcoin, it marked a turning point for the entire industry. The launch of the WLD token in 2023 sparked genuine interest in the potential of decentralized identifiers in the crypto economy and decentralized ecosystems.

But what is really behind this technology, and why is it so important for the future of digital security?

Rethinking Identity in Web3

Traditional approaches to identification assume that large companies and institutions control your personal data. Social networks, banks, and government agencies store your records, determine who can see them, and monopolize access to your information.

A decentralized identifier in the context of Web3 offers a radically different paradigm: you are the custodian of your digital identity. Instead of trusting intermediaries, you gain full control over what information is shared with others and for what purposes.

In a digital world where data has become the new currency, such an approach is critically important. A decentralized identifier provides the foundation for building a more transparent, secure, and user-centric Web3 ecosystem, where trust is based not on institutional reputation but on cryptographic guarantees.

How Does a Decentralized Identifier Work?

At its core, a decentralized identifier is built on blockchain — an immutable, distributed database that ensures transparency and resistance to manipulation. This mechanism makes it impossible for any single party to control or alter your identity without your consent.

Cryptographic Foundation

Every decentralized identifier begins with generating a pair of cryptographic keys. The public key is what you show to the world, your “address” in the digital space. The private key remains secret and acts as a “password” to all your identity data.

This mechanism guarantees that only you can authenticate, interact with various services, and manage your digital assets. According to Web3 principles, no institution has access to your private key, and therefore, to your data.

Decentralized Identifier in the Cryptocurrency Ecosystem

In the crypto world, a decentralized identifier addresses a critically important problem: how to verify users without losing anonymity?

For DeFi platforms, this means the ability to:

• Prevent fraud and account duplication without storing personal data centrally
• Verify participants with a transparent and immutable method
• Enable the distribution of financial services to people without access to traditional banking

A decentralized identifier becomes a bridge between regulatory requirements and user privacy, making DeFi solutions simultaneously safer and more accessible.

Key Advantages of Decentralized Identifiers

1. You control your data

For the first time in digital history, the user, not the corporation, owns their identity. You decide what information to share, with whom, and for how long.

2. Security against leaks and centralized attacks

Since the decentralized identifier is distributed, there is no single point of failure. No centralized database can be hacked. Additionally, cryptography guarantees the impossibility of forgery or theft of your data.

3. One identity — all services

You can use a single decentralized identifier across different platforms, networks, and services without needing separate registration or verification each time.

4. Reduced verification costs

For companies and institutions, a decentralized identifier means they do not have to collect, store, and protect personal data themselves. This significantly reduces infrastructure and insurance costs.

Top Decentralized Identifier Projects in 2024

Worldcoin (WLD)

Worldcoin has initiated a real revolution in the field of decentralized identifiers. Its innovative approach called World ID uses iris scan biometrics as a unique biometric identifier.

How it works: Each person undergoes a one-time iris scan that generates a unique decentralized identifier. This ensures the “one person — one account” principle, making it impossible for one individual to use multiple accounts for rewards or botnet creation.

Geographical expansion and partnerships: Worldcoin has integrated World ID with Ethereum, Optimism, and Polygon, expanding its versatility. The Tools for Humanity team is developing World Chain — a specialized Ethereum Layer-2 aimed at supporting human interaction in crypto. Negotiations with PayPal and OpenAI regarding integration have the potential to transform the financial sector.

Uniqueness: Using biometrics to create a decentralized identifier that simultaneously guarantees privacy and inclusivity for the unbanked population worldwide.

Prospects: As Worldcoin expands geographically, its decentralized identifier could become a global standard for user verification, especially in developed countries.

Lifeform

Lifeform offers a completely different approach to decentralized identifiers: instead of abstract codes, it creates hyper-realistic 3D avatars representing you in the digital world.

Funding and implementation: Valued at $300 million, the company completed Series B led by IDG Capital, having previously raised $100 million in Series A. Over 3 million unique addresses are already registered on the platform.

Technology: Lifeform integrates 3D avatars into Web2 social networks, creating a bridge between traditional internet and Web3. The avatar-based decentralized identifier allows users to securely manage their digital identity across platforms.

Uniqueness: This is the first project combining hyper-realistic visual identification with decentralized principles, providing users with a new level of expression and control.

Prospects: As the metaverse grows, Lifeform could become a standard for personal representation in virtual worlds.

Polygon ID

Polygon ID approaches decentralized identifiers through the lens of maximum privacy, using zero-knowledge proofs (ZKPs).

Technology: Users can verify their identity without revealing sensitive information. This means a decentralized identifier can confirm “you are over 18” without disclosing your date of birth.

Recent developments: In February 2024, The Human Institute, Polygon Labs, and Animoca Brands launched the “Humanity Protocol,” using palm recognition. In April 2024, Polygon officially launched its decentralized identifier protocol based on ZKPs.

Uniqueness: The focus on complete privacy during verification makes Polygon ID an ideal choice for privacy-conscious users.

Prospects: As privacy concerns grow, demand for Polygon ID will increase.

Ethereum Name Service (ENS)

ENS offers a simpler yet powerful way to work with decentralized identifiers: instead of complex addresses like “0x742d35Cc6634C0532925a3b844Bc7e7595f42e5A,” you get a user-friendly name like “alice.eth.”

Integration: In February 2024, ENS partnered with GoDaddy Inc., allowing users to link decentralized identifiers with traditional web domains. In April 2024, the platform added the top-level domain .box, the first ICANN-approved TLD on the blockchain.

Significance: ENS transforms a decentralized identifier on Ethereum from a technical abstraction into an easily recognizable “personality.”

Prospects: Widespread integration with the Ethereum ecosystem and beyond makes ENS the most widely recognized decentralized identifier.

Space ID

Space ID extends the concept of decentralized identifiers across all blockchains, offering a universal namespace.

Functionality: Unlike ENS, which is tied to Ethereum, Space ID allows registering a single decentralized identifier across multiple networks — Bitcoin, Ethereum, Solana, and others.

Applications: Space ID supports DeFi, NFT marketplaces, DAOs, and even crypto trading, demonstrating the versatility of decentralized identifiers.

Uniqueness: Cross-chain functionality enables users to maintain a consistent identity in a complex multi-network environment.

Prospects: As cross-chain interaction increases, Space ID will become increasingly important.

Galxe

Galxe brings decentralized identifiers into the realm of credentials and reputation. The platform allows users and organizations to create, manage, and utilize credentials in a decentralized manner.

Applications: Galxe credentials can be used for reputation systems, access control, experience verification, and many other purposes in Web3.

Potential: Galxe opens the door to decentralized identifiers that not only verify who you are but also showcase your skills, reputation, and experience.

Prospects: As the Web3 economy grows, demand for decentralized credentials via Galxe will increase.

Challenges of Decentralized Identifiers

Despite their potential, decentralized identifiers face several challenges:

Implementation complexity: Transitioning from centralized systems requires reworking both technology and legislation. Users need to learn how to manage private keys, which can be a challenge for ordinary people.

Technical barriers: Setting up a decentralized identifier requires knowledge of blockchain and cryptography. Ensuring interoperability between different blockchains is a complex task.

Key management risks: Losing your private key means losing access to your decentralized identifier. This risk necessitates new security management skills for users.

Regulatory uncertainty: Different countries perceive decentralized identifiers differently, creating regulatory ambiguity for projects in this space.

Trends in the Development of Decentralized Identifiers

Increasing Adoption

Decentralized identifiers will become more integrated into DeFi, NFT marketplaces, and DAOs, making crypto transactions safer and more convenient.

Privacy Improvements

Zero-knowledge proof and biometric technologies will advance, providing better privacy when using decentralized identifiers.

Cross-Chain Interoperability

Decentralized identifiers will evolve toward full interoperability, allowing users to have a single identity across all blockchains.

KYC and Regulatory Compliance

Decentralized identifiers will become a key tool for KYC and AML compliance, while maintaining privacy.

Expansion Beyond Crypto

Decentralized identifiers will extend into healthcare, education, finance, and other sectors, integrating with IoT and AI systems.

Conclusion

Decentralized identifiers are not just a technological innovation; they represent a philosophical shift toward the user as the sovereign of their data. Projects like Worldcoin, Lifeform, Polygon ID, ENS, Space ID, and Galxe demonstrate various approaches to solving one fundamental problem: how to verify who you are without losing control over your information.

In 2024, decentralized identifiers will become a critical component of the digital world, balancing security, privacy, and convenience. Which projects will stand the test of time will depend on their ability to address implementation challenges and regulatory compliance. But one thing is clear: decentralized identifiers are the future of digital identity management.