Decentralized Identity on the Blockchain: Which DID Projects Are Leading in 2024

When Worldcoin (WLD) entered the market, it drew the crypto community’s attention to decentralized identity technology (DID). But this is far from the only project working to give users control over their digital identity. Over the past year, dozens of innovative solutions have emerged, rethinking the concept of identity on the blockchain.

Why blockchain-based identity is a new direction in the cryptocurrency industry

In traditional internet, your identity is fragmented into hundreds of pieces: social media profiles, banking data, service accounts. Each entity gets a piece of your information, but no one has full control over it except corporations.

Decentralized identifiers change this paradigm. Instead of trusting Facebook data or a bank, you own your identity yourself. On the blockchain, this identity becomes portable, secure, and tamper-proof.

This is critical for the cryptocurrency market. DID reduces fraud risk, as each transaction is linked to a verified identity without revealing confidential data. This is especially important for DeFi applications that depend on smart contracts and trust.

How decentralized identity actually works

The foundation of DID is a cryptographic key pair: a public (used as an identifier in the network) and a private (kept only by you). This system guarantees that only you control your data, even when interacting with different platforms.

Blockchain serves as an immutable and secure database where records of your identity are not controlled by any organization. This solves two main problems of the old system: vulnerability to hacks (no single point of failure) and lack of user control over data.

Main advantages of DID in the crypto environment

Full control over data. You decide who and when gets access to your information — not the provider, not the platform.

Security and privacy. Cryptographic methods and the absence of centralized storage minimize leak risks. You can prove facts about yourself without revealing personal data — this is called zero-knowledge proofs.

Cross-service compatibility. DID works across different blockchains and platforms. One identity — multiple applications. No need to create a new account for each service.

Cost reduction. Eliminating intermediaries and centralized verification systems makes processes cheaper and faster.

Which DID projects to watch in 2024-2025

Worldcoin: biometrics against fraud

WLD current price: $0.50 (data as of December 26, 2024) Daily change: +0.22% Market cap: $1.29B

Worldcoin uses an innovative approach to blockchain identity — iris eye scan. This guarantees that one person receives a universal ID (World ID) only once, which is critical for combating bots and duplicate accounts.

World Chain (layer-2 network on Ethereum, developed by Tools for Humanity), allows humans, not bots, to interact with the blockchain. The project is integrated with Ethereum, Optimism, and Polygon.

The main difference of Worldcoin is global accessibility. The project targets residents of countries with underdeveloped banking systems, offering them a universal basic income through WLD tokens.

Pros: Innovative biometrics, inclusivity, mass potential.
Cons: Regulatory issues with biometric data in some countries, challenges in global expansion.

Lifeform: 3D avatars as identity

Lifeform creates hyper-realistic 3D avatars that become your decentralized personality in Web3. The company recently completed a Series B round with a valuation of $300 million, attracting investments from IDG Capital. Previously, the company raised $100 million in Series A.

Over 3 million addresses already use the platform. Lifeform integrates avatars into Web2 social networks, creating a bridge between digital and physical reality.

Pros: Secure encryption, ease of use, broad compatibility.
Cons: Requires specialized knowledge for implementation, vulnerable to cyberattacks.

Polygon ID: privacy via zero-knowledge proofs

Polygon ID uses zero-knowledge proofs (ZKP) — a technology that allows you to verify information about yourself without revealing details. Perfect for private payments and passwordless verification.

In 2024, Polygon launched a ZKP-based identification protocol, and partnerships with Human Institute and Animoca Brands led to the creation of Humanity Protocol with palm recognition.

Pros: Maximum privacy, scalability, Ethereum compatibility.
Cons: Relatively new product, integration challenges.

Ethereum Name Service: simple names instead of addresses

ENS converts long addresses like 0x742d35Cc6634C0532925a3b844Bc39e7ebF34e41 into human-readable names like alice.eth. This simplifies blockchain interaction.

In February 2024, ENS signed an agreement with GoDaddy, allowing users without technical knowledge to manage ENS names. Later, support for .box domains (the first on-chain TLD approved by ICANN) was introduced.

Pros: Convenience, widespread recognition in the Ethereum community, universal utility.
Cons: Scalability depends on Ethereum, potential issues during network congestion.

Space ID: unified identity across all blockchains

Space ID enables registering domain names that work on multiple blockchains simultaneously. One identifier — multiple networks. This solves the fragmentation problem in Web3.

The project supports everything from crypto trading to NFT marketplaces and DAOs.

Pros: Cross-chain compatibility, convenience, versatility.
Cons: Competition from other domain services, still relatively unknown outside crypto circles.

Galxe: reputation as identity

Galxe uses on-chain account data to create a decentralized credential network. The reputation system based on interaction history is a new form of identity, where your reputation becomes an asset.

The platform is open and extensible, applicable in DeFi, access management, and other areas.

Pros: Innovative approach to data use, broad application potential.
Cons: Early stage, requires time for widespread understanding.

Industry challenges faced by DID

Implementation complexity. Transitioning from centralized systems requires significant retraining of users and providers.

Technological barriers. Interoperability between different blockchains remains a complex task. Coordination among many stakeholders is needed.

Key management. Losing a private key means losing access to your identity — creating new risks for users accustomed to password recovery via email.

Regulation. Different countries apply different data protection standards. DIDs must comply with local laws while maintaining decentralization.

Future trends in the DID industry

Mass adoption in DeFi, NFT, and DAO. As awareness grows, DIDs will become standard rather than exception.

Enhanced privacy via biometrics and ZKP. Expect breakthroughs in facial recognition, palm scanning, and other biometric methods.

Full cross-chain compatibility. DIDs will work everywhere — users will have a single identity across all networks.

Integration with KYC/AML. DID projects will address regulation issues, allowing users to verify once and use everywhere.

Beyond crypto. DIDs will start to be used in healthcare, finance, e-governance. Integration with IoT and AI will open new opportunities for secure automation.

Conclusion: decentralized identity is the future of blockchain interaction

Decentralized identity on the blockchain is not just a technology; it’s a rethinking of the relationship between users and data. Instead of being a product for corporations, your identity becomes an asset you control.

Current projects (Worldcoin, Polygon ID, ENS, and others) demonstrate that the future has already arrived. Each project chooses its own path — through biometrics, privacy, convenience, or reputation. But all are moving in the same direction: toward decentralization of identity on the blockchain.

As DID technology develops, it will replace the old identity management system. It won’t happen overnight, but the trend is clear. Web3 will belong to those who control their identity. And controlling it can only be achieved through decentralization.