2024 Must-See Digital Identity(Blockchain Projects Overview

Starting from the Identity Management Revolution

One of the most talked-about phenomena in the crypto market this year is the surge of the Worldcoin project founded by Sam Altman among user communities. This project’s popularity has brought the previously overlooked identity verification technology in the Web3 ecosystem into the spotlight. The success of Worldcoin demonstrates that, supported by blockchain technology, digital identity management has moved from theory to practice.

As Web3 and the decentralized digital identity(Distributed Digital Identity, DID) concept continues to evolve, more projects are exploring how to redefine authentication within a decentralized framework. The core logic behind this shift is: user data should not be monopolized by a single institution but should be owned and controlled by individuals.

Understanding the Essence of Decentralized Identity

In the traditional internet, your personal information is controlled by platform companies like Facebook and Google. They decide what you can see and how your data is used. But in the Web3 world, the definition of digital identity has been completely rewritten—you become the owner of your own information.

Decentralized Identity(DID) embodies this new paradigm. It no longer relies on any central authority but returns control of identity to the user through blockchain technology. This significantly enhances your control over personal data and provides unprecedented privacy protection.

From a technical perspective, this shift creates a more democratic and user-respecting digital ecosystem. Every time you log into an app or make a transaction, you no longer need to hand over personal information to a third party but can verify your identity through cryptographic proof.

How DID Works at the Technical Level

Understanding how DID operates starts with key pairs. When you create a DID identity, the system generates a pair of keys—public key and private key. The public key is like your “identity badge” online, visible to anyone; while the private key is like a key, only you can possess and use it.

This asymmetric encryption design ensures that only the true owner of the identity can operate all matters related to that identity. When you need to prove your identity, you use your private key to create a digital signature, and others can verify this signature using your public key—entirely without involving any third party.

Blockchain’s role here is to provide an immutable record layer. Once your DID information is recorded on-chain, no one can forge or alter it, fundamentally eliminating the possibility of identity impersonation.

Why the Crypto World Needs DID

In the DeFi ecosystem, trust is the scarcest resource. DID greatly reduces fraud risk by associating each transaction with a verifiable identity. This is crucial for financial applications relying on smart contracts—users need to be confident that the other party’s identity is genuine and reliable.

Furthermore, DID addresses a long-standing issue in the crypto market: how to complete identity verification while protecting privacy. Using advanced cryptographic techniques like zero-knowledge proofs, users can prove they meet certain conditions (e.g., over 18 years old) without revealing specific personal information.

For centralized services like exchanges and lending platforms, DID offers a new KYC/AML solution. It can meet regulatory requirements while safeguarding user privacy—a perfect balance.

Core Advantages of DID

1. True Data Sovereignty

You no longer need to repeatedly fill out personal information on different platforms. A DID can be used across various applications and services, simplifying operations and keeping data always under your control.

2. Fundamental Security Enhancement

Without a central database, there is no single point of failure. Even if an application is hacked, your core identity information remains secure—because the application itself does not store this sensitive data.

3. Seamless Cross-Platform Collaboration

DID can be used on multiple chains like Ethereum, Polygon, Optimism, enabling true interoperability. Users are no longer locked into a single ecosystem but can move freely.

4. Cost Structure Optimization

With fewer intermediaries involved, the cost of identity verification drops significantly. This efficiency is especially evident in industries requiring large-scale identity checks, such as finance and healthcare.

2024 Worth Watching DID Projects Matrix

Worldcoin: Biometric-Driven Global Identity

Worldcoin uses iris scanning technology to create World ID—a truly unique digital identity. The brilliance of this approach lies in combining the reliability of biometric recognition with the decentralization of blockchain.

With a $300M funding scale and an operational network spanning over 50 countries, Worldcoin not only proves the commercial viability of this track but also turns DID from a technical concept into a practical product. After obtaining a World ID, users can use this identity on networks like Ethereum, Optimism, Polygon, and even participate in UBI (Universal Basic Income) distribution.

Negotiations with PayPal and discussions with OpenAI indicate that Worldcoin is trying to expand DID applications from the crypto world into mainstream finance and AI fields. The underlying support of World Chain further strengthens its ecosystem integrity.

Core Competitiveness: An innovative combination of biometric recognition and blockchain, truly solving the “one person, one identity” problem.

Risks: Privacy advocates’ concerns over biometric data collection, and the uncertainty of global regulatory attitudes.

Lifeform: A New Paradigm of 3D Virtual Identity

If Worldcoin focuses on the uniqueness of identity verification, then Lifeform is building a complete virtual identity ecosystem—using hyper-realistic 3D virtual avatars to represent your digital identity.

The project’s funding progress indicates strong market optimism: Series A funding of $100M, Series B valuation reaching $300M, with top investors like IDG Capital. Currently, over 3 million on-chain addresses are using Lifeform services.

Lifeform’s innovation lies in integrating DID with the metaverse. Users not only get a cryptographic identity but also a representative avatar in the virtual world. This fusion opens up new application possibilities—from virtual socializing to digital asset ownership—through a unified identity.

Core Competitiveness: Fusion of 3D virtual avatars and DID, ahead of the curve for the metaverse era.

Potential Issues: High technical complexity, large-scale adoption requires time; cross-platform compatibility still needs improvement.

Polygon ID: Privacy-First Identity Solution

Polygon ID takes a different technical approach—using zero-knowledge proofs(ZKP) to achieve identity verification. This means you can prove your identity or qualifications without revealing any specific information.

Imagine a scenario: a DeFi lending protocol needs to verify if you meet lending criteria. With Polygon ID, you only need to submit a zero-knowledge proof demonstrating your eligibility, while your financial data and personal info remain private.

In early 2024, the project partnered with Human Institute and Animoca Brands to launch Humanity Protocol, which uses palm recognition technology to verify real human identities. This innovation combines biometric recognition with privacy protection.

Core Competitiveness: Absolute privacy protection provided by zero-knowledge proofs, supporting complex identity verification needs.

Challenges: Relatively new implementation, high market education costs.

Ethereum Name Service: Humanized Identity Entry

ENS seems simple—turning an address like “0x742d35Cc6634C0532925a3b844Bc9e7595f42e” into “alice.eth”. But behind this simplification is a significant breakthrough in humanizing blockchain.

By 2024, ENS is no longer just a name resolution service. Its collaboration with GoDaddy breaks down barriers between traditional domain names and blockchain domains. More aggressively, it integrates TLDs like .box recognized by ICANN, marking the first commercialization of on-chain TLDs.

This means your digital identity can have a formal name like “yourname.box,” not just a technical “.eth” suffix.

Core Competitiveness: Widespread community recognition, integration with traditional domain systems, high usability.

Limitations: Scalability issues under mainnet gas costs.

Space ID: A Unified Standard for Cross-Chain Identities

Space ID aims to be a multi-chain namespace—allowing you to use the same identity across different blockchains. This addresses a real pain point in the current crypto ecosystem: fragmented identities across multiple chains.

From DeFi transactions to NFT minting and DAO voting, Space ID provides a unified identity layer. This cross-chain interoperability is destined to become standard in the future, and Space ID is positioning itself accordingly.

Core Competitiveness: Truly cross-chain identity standard, broad application scenarios.

Market Status: Currently limited recognition outside the crypto community.

Galxe: Infrastructure for Reputation Systems

Galxe takes a different approach—transforming DID into a reputation proof system. By aggregating your behavior data across various Web3 applications, Galxe creates a comprehensive identity profile.

This profile can be used for access control, reputation scoring, community management, and more. In other words, your DID is no longer just a verification tool but an asset reflecting your standing in the entire Web3 ecosystem.

Core Competitiveness: Connecting identity with reputation, creating new economic incentive models.

Development Stage: Still early, needs more application partners.

Practical Challenges in DID Implementation

Difficulties in Large-Scale Migration

Transitioning from centralized identity management to DID requires coordinated efforts from users, developers, and regulators. The difficulty of this paradigm shift is often underestimated. Users are accustomed to account-password systems; adopting DID involves cognitive costs. Developers need to learn new tech stacks; regulators need to understand and accept this new paradigm.

User Experience Challenges in Key Management

The security of DID relies on the absolute confidentiality of private keys, but this also creates major user experience hurdles. Losing a private key is equivalent to permanently losing control of the identity. Hardware wallets and multi-signature solutions help but do not fully solve this fundamental issue.

Fragmentation of Cross-Chain Standards

Currently, various blockchain projects are developing their own DID standards, leading to poor interoperability. While projects like Space ID are working to unify standards, true unification still takes time.

Regulatory Uncertainty

Different countries have vastly different attitudes toward DID regulation. Some welcome it as a privacy tool, others restrict it due to anti-money laundering concerns. This uncertainty limits the global adoption of DID.

Evolution Directions of the Digital Identity Ecosystem

Accelerated Application Penetration

With the demonstration effects of projects like Worldcoin and Polygon ID, more applications will start integrating DID verification. By the end of 2024, at least half of DeFi lending protocols are expected to support some form of DID.

Breakthroughs in Privacy Technologies

The application of zero-knowledge proofs, homomorphic encryption, and other technologies will become more widespread and efficient. We will see more projects adopting advanced privacy protection schemes, even achieving complete data concealment in certain scenarios.

Gradual Realization of Interoperability

Although fragmentation remains, the development of cross-chain DID standards will gradually address this issue. By 2025, users may truly log into different chain applications with a single identity.

Blockchain Identity Extending to Traditional Industries

Fields like medical records, educational credentials, and professional qualifications will begin exploring blockchain-based DID solutions. This expansion will greatly enhance the application value of DID.

Deep Integration of Biometrics and AI

Iris recognition, facial recognition, and other technologies will combine with AI models to provide more robust identity verification. AI can also help detect identity fraud and abnormal behaviors.

Final Thoughts

Decentralization of digital identity is a profound paradigm shift. From user data monopolized by big tech companies to individuals owning their own digital identities, this is not only a technological advancement but also a redistribution of power.

The emergence of projects like Worldcoin, Lifeform, and Polygon ID marks this shift from vision to reality. Although many challenges remain, the development of blockchain technology offers unprecedented possibilities.

In the foreseeable future, owning a self-managed, cross-platform recognized, privacy-protected digital identity will become standard for Web3 users. This will not only change how we interact in the crypto world but also gradually influence the architecture of the entire internet ecosystem.