## Decentralized Identities in Web3: Which Blockchain Projects Dominate in 2024

The development of decentralized identifier technology (DID) received a new boost in 2023-2024 when major innovative platforms began actively integrating digital identity management solutions. The Web3 ecosystem needs reliable authentication mechanisms, which is why DID are becoming a critical component of blockchain infrastructure.

## Why Decentralized Identity Is Changing the Cryptocurrency Market

In traditional identity management systems, your personal data is controlled by third parties — financial institutions, social networks, corporations. Decentralized identifiers completely overturn this model: you become the full owner of your digital identity.

Blockchain technology provides a secure foundation for storing DID, where information is protected from centralized control and manipulation. Each DID is created based on a cryptographic key pair — the public (used as an identifier) and the private (remaining fully under your control). This guarantees that only you can manage and control your identity data, even when interacting with different platforms.

### The significance of DID for the DeFi ecosystem and crypto applications

Decentralized financial services rely on smart contracts and automated systems that require reliable user verification. DID provide exactly such a mechanism — linking each transaction to a verified identity without revealing confidential information.

This addresses a critical challenge in the cryptocurrency industry: how to simultaneously ensure security, regulatory compliance (KYC/AML), and preserve user privacy? DID enable achieving this balance, reducing the risk of fraud and deception on DeFi platforms.

## Main Advantages of Decentralized Identities

**Full control over personal data.** In DID systems, you decide who has access to your information and how it is used. This is a fundamental departure from the traditional paradigm where corporations monopolize data.

**Protection against leaks and cyberattacks.** The absence of a centralized data store means no single point of failure. Blockchain architecture and cryptographic methods provide multi-layered protection, making the system resilient to hacking.

**Versatility across various applications.** One DID can operate on different platforms and blockchains — from DeFi services to NFT marketplaces. Users gain a unified digital identity without the need for re-verification.

**Reduced operational costs.** Eliminating intermediaries and centralized verification mechanisms cuts verification expenses, which can be especially significant for global financial operations.

## Leading DID Platforms in the Cryptocurrency Sphere

### Worldcoin (WLD): biometric approach to decentralized identity

Worldcoin implements an innovative concept called World ID, built on biometric data (iris scan). This approach allows creating a unique, tamper-proof digital identifier and guarantees that each person receives their WLD tokens only once.

**Current Worldcoin metrics:**
- Price: $0.49 per token
- 24-hour change: -0.50%
- Market cap: $1.28B
- 24h trading volume: $1.44M

The platform integrates with major blockchain networks (Ethereum, Optimism, Polygon), expanding its applicability. The Tools for Humanity team is developing World Chain — an Ethereum layer-2 solution that rethinks blockchain priorities, placing people at the center rather than automated systems.

**Strengths:**
- Innovative use of biometrics to create a unique DID
- Focus on inclusivity and accessibility for the unbanked
- Global aim to provide universal basic income

**Challenges:**
- Privacy concerns related to biometric data collection
- Difficulties with global implementation across different jurisdictions

( Lifeform: digital avatars and decentralized identity

Lifeform leads in creating hyper-realistic 3D avatars integrated with decentralized identity management systems. The platform has developed specialized visual DID protocols, secure contracts, and SDKs for metaverses.

The company has attracted significant investments: )Series A, ###initial round, recently completed Series B led by IDG Capital with a valuation of $300M. The service supports over 3 million unique addresses.

**Key features:**
- Integration of 3D avatars into Web2 social ecosystems
- Modern encryption and authentication methods
- User-friendly interface for managing digital identity from anywhere in the world

**Potential challenges:**
- Requires specialized knowledge for implementation
- Compatibility issues between different identification systems
- Vulnerability to cyberattacks if misconfigured

$100M Polygon ID: privacy through zero-knowledge proofs

Polygon ID applies Zero-Knowledge Proofs $15M ZKP### technology to create a digital identification solution focused on maximum privacy. Users control their credentials on their own devices, can log in without passwords, and exchange information securely.

In February 2024, Human Institute, Polygon Labs, and Animoca Brands announced the creation of the “Humanity Protocol,” utilizing palm recognition technology. In April 2024, Polygon launched its own ZKP-based identity protocol, enabling identity verification without revealing confidential data.

**Advantages:**
- Cutting-edge privacy protection via ZKP
- Scalability through integration with the Polygon ecosystem
- Compatibility with Ethereum applications

**Limitations:**
- Relatively new product, requiring further development
- Some developers face integration challenges

( Ethereum Name Service )ENS###: human-readable identifiers for blockchain

ENS provides a decentralized way to link human-friendly names (for example, “alice.eth”) with Ethereum blockchain addresses. This greatly simplifies asset interactions and transactions, replacing complex hexadecimal addresses with memorable names.

In February 2024, ENS partnered with GoDaddy to connect ENS names to traditional web domains. Since April 2024, the platform has integrated .box domains, approved by ICANN as TLDs. This is the first on-chain TLD available in the ENS manager app alongside .eth.

**Advantages:**
- Intuitive and easy to use
- Widely recognized within the Ethereum community
- Versatile for ecosystem interactions

**Disadvantages:**
- Scalability limitations based on Ethereum
- Potential issues during network congestion

( Space ID: cross-chain domain space

Space ID offers a universal domain name space operating across various blockchains. Users can register and manage domains, obtaining a single identifier that functions on different networks and platforms.

The project supports a wide range of applications — from crypto trading and lending to NFT minting — demonstrating a universal approach to digital identity in Web3.

**Strengths:**
- Cross-chain functionality ensures compatibility
- Convenience of managing a single identifier across multiple blockchains
- Broad applicability in various crypto applications

**Challenges:**
- Competition with other domain name services
- Limited perception outside the crypto community

) Galxe: decentralized credential network

Galxe creates a decentralized credential infrastructure based on user account data. The platform allows users and organizations to create, manage, and apply credentials in a decentralized environment, which is especially useful for reputation systems and access management.

Galxe is designed as an open and extensible system supporting various applications in DeFi and other Web3 areas.

**Distinctive features:**
- Innovative use of account data to create DID
- Potential for use in reputation systems
- Flexibility for various use cases

**Current limitations:**
- Early stage of development
- Needs greater awareness within the crypto community

## Obstacles to the Development of Decentralized Identities

**Migration and adaptation complexity.** Transitioning from centralized identity management systems to DID requires significant organizational and technical changes. Users and providers need to relearn and adapt to new data management paradigms.

**Technical and architectural challenges.** Developing DID involves working with complex cryptographic algorithms and blockchain technology. Ensuring interoperability between different platforms requires coordination among numerous stakeholders.

**Risks of private key management.** Users must carefully safeguard their private keys — losing a key means losing access to their identity. Additionally, decentralized data exchange can introduce new vulnerabilities.

**Regulatory uncertainty.** DID must comply with various legal data protection requirements across countries. Balancing regulatory compliance with maintaining the decentralized nature of the system is a complex task.

## Future Perspectives for DID and Blockchain Identity

**Expansion in crypto-economics.** As awareness of DID grows, their integration into DeFi protocols, NFT marketplaces, and DAOs is expected to increase. This will enhance security and user experience convenience.

**Enhanced privacy features.** Emerging data protection issues drive projects to develop more advanced privacy mechanisms, including improvements in ZKP and biometric systems.

**Cross-chain interoperability.** DID will evolve to ensure full compatibility across different blockchain networks, allowing users to maintain a single identifier across all platforms.

**Regulatory integration.** Under increased oversight, DID could become a key tool for fulfilling KYC/AML requirements, balancing regulatory demands with privacy protection.

**Expansion beyond cryptocurrencies.** DID and blockchain technologies are gradually spreading into healthcare, government services, intellectual property rights management. Integration with IoT and AI systems could revolutionize data management and automation.

## Closing: DID as the Foundation for Future Web3

Decentralized identities are a fundamental technology for building a secure, private, user-centric digital world. By giving you full control over your data, DID are transforming how we interact with digital services and blockchain applications.

As DID continue to evolve and expand their applications, they will play an increasingly central role in the cryptocurrency ecosystem and the broader internet. The ongoing development of these technologies not only improves current interaction processes but also paves the way for a large-scale societal shift from centralized data control to user sovereignty.