Decentralized Identifiers (DID): Key Projects and Web3 Trends in 2024-2025

Why DID Has Become a Focus in the Crypto Market

When Worldcoin launched its token WLD, the cryptocurrency sector took a new look at decentralized identifiers. Although Web3 and distributed identity technology have existed for several years, the Sam Altman project truly drew widespread attention to this niche. Today, DID is considered a key tool for building a safer and user-centric digital ecosystem.

The current price of Worldcoin (WLD) is $0.49 with a 24-hour change of -2.36%, and the project continues to develop and expand its influence in the cryptocurrency market.

What Is a Decentralized Identifier

Distributed identity (distributed identity) differs radically from traditional approaches to managing personal data. Instead of trusting data to large corporations and financial institutions, Web3 users gain full control over their digital identity.

This mechanism is based on cryptography. When creating a DID, a pair of cryptographic keys is generated: a public (open to everyone) and a private (confidential). The public key serves as your identifier in the network, while the private key provides secure access to your data.

Blockchain acts as a tamper-proof database where all DIDs are recorded. This eliminates a single point of failure and guarantees that no organization can monopolize your identity.

Benefits of Distributed Identity in Crypto

Decentralized identifiers solve several problems at once:

Control over personal data. You decide who can access your information and how it will be used. This is the complete opposite of systems where third parties control your data.

Privacy and protection against hacks. The absence of a centralized data store critically reduces the risk of leaks. Cryptographic methods provide an additional layer of security for your transactions and interactions.

Universal compatibility. DIDs can operate across various platforms without the need for re-verification on each.

Cost reduction. Eliminating intermediaries and centralized verification systems makes the process more efficient and economical.

The Role of DID in DeFi and the Cryptocurrency Ecosystem

In decentralized finance (DeFi), distributed identity becomes a critical tool. It allows linking each transaction to a verified identity without revealing sensitive user information.

This reduces fraudulent activities and increases trust in platforms. The crypto market has historically struggled with anonymity, which facilitates criminal activity. DID offers a balance: verification without compromising privacy.

Top DID Projects in 2024-2025

Worldcoin: biometric data as the basis of identity

Worldcoin uses an innovative approach — biometric data (iris scan) to create a unique World ID. This helps implement the “one person — one account” principle across all platforms.

World ID is integrated into major blockchain networks: Ethereum, Optimism, and Polygon, ensuring maximum versatility. The Tools for Humanity team is developing World Chain — an Ethereum Layer-2 network reimagining interactions between people and automated systems.

Worldcoin is negotiating with PayPal and OpenAI to expand cooperation in the financial sector and artificial intelligence.

Advantages:

• Innovative approach to universal income
• Inclusivity for unbanked populations
• Broad application potential

Disadvantages:

• Privacy concerns with biometric data
• Challenges with global implementation in different countries

Outlook: Worldcoin could become a significant player in the global crypto economy, especially in regions without access to traditional banking.

Lifeform: 3D avatars and visual DIDs

Lifeform leads in creating hyper-realistic 3D avatars and visual DID protocols for Web3. The company recently completed a Series B funding round, attracting investments valued at $300 millions.

Previously, Lifeform raised $100 millions in Series A and about $15 million in early funding. The platform is supported by over 3 million unique addresses, demonstrating strong community adoption.

The project’s uniqueness lies in integrating hyper-realistic avatars into Web2 social networks, creating a bridge between digital and physical reality. This provides Web3 users with tools for independent and secure identity management.

Advantages:

• Enhanced security through modern encryption
• Convenient global access
• Simplified identification process
• Intuitive user interface

Disadvantages:

• Potential vulnerability to cyberattacks
• Requires specialized knowledge for integration
• Possible compatibility issues across platforms

Polygon ID: privacy via zero-knowledge proofs

Polygon ID uses ZKP (Zero-Knowledge Proofs) technology to create an identification system that preserves full user privacy. You can verify your identity without revealing any sensitive information.

The platform allows managing credentials locally on the user’s device, enabling passwordless login. Developers find it easy to integrate identity verification into decentralized applications (dApps).

In February 2024, Polygon Labs launched Humanity Protocol together with Human Institute and Animoca Brands, using palm recognition technology for secure Web3 interactions.

Advantages:

• Unmatched privacy level
• Excellent scalability
• Compatibility with the Ethereum ecosystem

Disadvantages:

• Relatively new technology on the market
• Challenges in integration and deployment

Ethereum Name Service (ENS): human-readable addresses

ENS provides an easy way to use understandable names instead of complex hexadecimal Ethereum addresses. For example, “alice.eth” instead of a long string of characters.

In February 2024, ENS partnered with GoDaddy to connect ENS names to web domains, simplifying usage for non-technical users.

Since April 2024, the platform has integrated .box domains (approved by ICANN), becoming the first on-chain TLD of its kind.

Advantages:

• Ease of use
• Wide recognition within the Ethereum community
• Universal utility for Web3

Disadvantages:

• Limited by Ethereum network resources
• Possible scalability issues

Space ID: cross-chain identification

Space ID offers a universal namespace operating across multiple blockchains. Users can register and manage domain names, maintaining a unified identity across platforms.

The project supports a wide range of applications: crypto trading, lending, NFT minting, demonstrating a comprehensive approach to distributed identity.

Advantages:

• Cross-chain compatibility
• Convenience and simplicity
• Broad applicability in the crypto ecosystem

Disadvantages:

• Competition from other solutions
• Limited recognition outside the crypto community

Galxe: decentralized credential infrastructure

Galxe uses account data to create a decentralized credential network supporting Web3 infrastructure. The platform allows users and organizations to create and manage credentials in a fully decentralized environment.

This is especially useful for reputation systems, access management, and identity verification in DeFi applications.

Advantages:

• Innovative use of account data
• Huge potential for various applications

Disadvantages:

• Early-stage project
• Difficulties in widespread understanding of the technology

Main Challenges for DID

Implementation complexity. Transitioning from centralized systems requires large-scale technological and legal changes. Users and developers must adapt to new identity management approaches.

Technical hurdles. Cryptography and blockchain are complex fields. Interoperability between different platforms requires coordination among many stakeholders.

Private key management. Losing a private key means losing access to your identity. This demands high responsibility and technical literacy from users.

Regulatory uncertainty. Different countries have varying data protection laws. Achieving compliance while maintaining decentralization is a difficult balance.

The Future of DID Technology

Mass adoption. As awareness of DID grows, they will be integrated into everyday crypto transactions, especially in DeFi, NFT marketplaces, and DAOs.

Advanced privacy features. Increasing concerns about data protection will drive the development of more robust solutions based on ZKP and biometrics.

Cross-chain compatibility. DID will work seamlessly across all blockchains, allowing users to maintain a single identifier on any platform.

KYC and regulation. Under increasing regulatory oversight, DID could become a key tool for fulfilling Know Your Customer requirements, balancing compliance and privacy.

Beyond crypto. Distributed identity will find applications in healthcare, finance, e-governance, and IoT. Integration of DID with AI and smart devices will create safer automation.

Summary

Decentralized identifiers open the door to a future where you have full control over your data and personal information. Projects like Worldcoin, Lifeform, Polygon ID, and others demonstrate diverse approaches to implementing this concept.

With the development of Web3 and distributed identity technology, identity management systems will become safer, more private, and user-oriented. The crypto sector is at a pivotal point where DID could become the standard for digital interaction.