Decentralized Identity on Blockchain: Top Digital Personal Data Management Projects in 2024

In recent years, the concept of digital identity blockchain has gained increasing significance in the Web3 ecosystem. The launch of Worldcoin (WLD) priced at $0.50 with a 24-hour increase of +0.22% and a market capitalization of $1.29B has demonstrated widespread interest in the decentralized identity sector. This event has prompted investors and developers to focus on the potential of personal data management through distributed systems.

Why Decentralized Identity is Becoming a Critical Necessity

In the digital age, traditional models of managing personal information are becoming obsolete. Centralized systems concentrate user data in the hands of large corporations and government agencies, creating risks of leaks and abuse. Decentralized identity (DID) offers a fundamentally different approach: you become the full owner of your digital self.

Blockchain technology enables the creation of an immutable and protected database free from centralized control. Each DID is built on a cryptographic key pair — the public key serves as your network identifier, while the private key remains with you, providing exclusive access to manage your identity. This guarantees that no organization can monopolize your personal data.

How DID is Transforming the Cryptocurrency Market and DeFi

In the crypto market, decentralized identifiers serve as trust guarantors. They allow linking each transaction to a verified identity without revealing private information — an ideal balance between transparency and confidentiality.

For the DeFi ecosystem, this is especially important. Decentralized finance platforms often operate without intermediaries and rely on smart contracts. Integrating DID enhances security by enabling user verification and preventing fraudulent activities. Additionally, it facilitates compliance with KYC/AML regulations without compromising decentralization principles.

Key Advantages of Decentralized Identity

Full control over your data: Unlike traditional platforms where third parties decide who can access your data and how, DID gives you absolute authority over this process. You determine what information to disclose and to whom.

Cryptographic protection and no single point of failure: The decentralized architecture eliminates storage that could be compromised. Each user stores their keys independently, significantly reducing the risk of large-scale data breaches.

Cross-platform universality: One DID can be used across multiple platforms and networks without re-verification. This greatly simplifies user experience and expands interaction possibilities.

Cost savings on verification: Eliminating intermediaries reduces costs associated with identity checks and management. This is especially relevant for organizations conducting hundreds of thousands of identity verifications regularly.

Worldcoin (WLD): Biometrics as the Foundation of Identity

Worldcoin stands out from other projects through its use of biometric data. The World ID system scans the iris of each user to create a unique identifier that guarantees the “one person — one account” principle.

This solution is particularly relevant in combating bots and account duplication. Tools for Humanity, the team behind Worldcoin, developed World Chain — an Ethereum layer-2 network prioritizing interactions with real people rather than algorithms.

Current WLD metrics:

• Price: $0.50
• 24-hour change: +0.22%
• Market cap: $1.29B
• Daily trading volume: $1.54M

Worldcoin is actively negotiating with major industry players. Discussions with PayPal are ongoing, and collaboration with OpenAI is in the approval stage. This could significantly expand the project’s influence in the financial sector and artificial intelligence.

Strengths: innovative approach to universal income, high potential for global reach, especially among underserved populations without banking access.

Challenges: privacy concerns related to biometric data, difficulties in global deployment, regulatory restrictions in certain jurisdictions.

Lifeform: Visual Identity in Web3

Lifeform offers a different approach — the company specializes in creating hyper-realistic 3D avatars as a form of decentralized identity. The company has developed protocols for visual DID, secure smart contracts, and SDKs for metaverses.

With an valuation of $300 million, Lifeform recently completed Series B funding led by IDG Capital. Previously, the company raised $100 million in Series A and $15 million in early-stage funding. Support from over 3 million unique addresses indicates broad recognition.

Integrating digital avatars into Web2 social networks creates a bridge between real and digital identity. Users gain tools for independent management of their Web3 persona.

Advantages: modern encryption methods, ease of access from anywhere, reduced manual verification costs, intuitive interface.

Disadvantages: vulnerability to cyberattacks, need for specialized knowledge for implementation, cross-system compatibility issues.

Polygon ID: Privacy via Zero-Knowledge Proofs

Polygon ID employs revolutionary zero-knowledge proof (ZKPs) technology. This cryptographic technique allows confirming any claim about oneself without revealing confidential details.

In February 2024, Human Institute partnered with Polygon Labs and Animoca Brands to create the Humanity Protocol, utilizing palm recognition technology. In April 2024, Polygon launched a full-featured identification protocol based on ZKPs.

The architecture enables users to manage their credentials on their devices and log in without passwords. Developers find it easier to integrate identity verification into decentralized applications.

Advantages: enhanced privacy, scalability, Ethereum ecosystem compatibility.

Disadvantages: relatively new in the market, integration complexities with existing systems.

Ethereum Name Service (ENS): Human Names for the Blockchain

ENS addresses a long-standing issue for Ethereum users — the need to remember long hexadecimal addresses. Instead, people use simple names like alice.eth.

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

This is not just interface simplification — it creates a new paradigm of addressing, where digital identity becomes memorable and socially meaningful.

Advantages: user-friendly, widely recognized within the ecosystem, versatile applicability.

Disadvantages: Ethereum scalability limitations, potential scalability issues.

Space ID: Cross-Chain Identity Unity

Space ID offers a universal namespace operating across multiple blockchains simultaneously. This means one DID can function on Ethereum, Solana, BNB Chain, and other networks without creating separate identifiers.

The project supports a wide range of applications — from crypto trading and token lending to NFT minting. It demonstrates a universal approach to decentralized identity management.

Advantages: improved cross-network compatibility, ease of use, broad application scope.

Disadvantages: competition with other domain name services, limited recognition outside the crypto community.

Galxe: Reputation as a Currency in Web3

Galxe leverages user account data to build a decentralized credential network. This infrastructure allows users and organizations to create, store, and utilize verification elements in the open Web3 environment.

The platform is designed as an open and extensible system supporting applications in reputation systems, access management, and rights distribution. This is especially valuable for DAOs and decentralized finance.

Pros: innovative use of credentials, potential for numerous applications.

Cons: early development stage, complexity in perception and adoption for mass users.

Main Challenges in Developing Decentralized Identity

Transition complexity: Moving from familiar centralized systems to decentralized ones requires fundamental changes. Users must learn to manage private keys, providers need to rethink architecture, regulators must develop new rules.

Technical obstacles: DID systems involve advanced cryptography and blockchain protocols. Ensuring interoperability between different platforms is a complex coordination task.

Private key management: Losing a private key means complete loss of access to the identity. This demands high responsibility from users.

Legal uncertainty: Different jurisdictions have incompatible data protection laws. Maintaining decentralization while complying with regulations is a delicate balance.

The Future of Blockchain Digital Identity

Growing adoption in DeFi and NFTs: As the ecosystem matures, DIDs will become standard rather than exception. User experience will improve, and security will increase.

Advanced privacy features: Development of ZKP technologies and biometric systems will create more reliable verification methods without data disclosure.

Cross-blockchain functionality: DIDs will operate seamlessly across networks, allowing users to maintain a unified identity on any platform.

Regulatory compliance: DIDs will become key tools for meeting KYC/AML requirements without compromising privacy.

Expansion beyond crypto: Blockchain-based digital identity management systems will begin to be used in healthcare, finance, government services, IoT, and AI systems. Smart automation and secure data management will open new horizons.

Final Thoughts

Decentralized identity represents a fundamental shift in how we manage our digital lives. Instead of trusting corporations with our data, users can fully control what information to disclose and to whom. Worldcoin, Lifeform, Polygon ID, ENS, Space ID, and Galxe showcase a variety of approaches to solving this problem — from biometrics to ZKPs, from visual avatars to cross-chain domains.

As blockchain technology advances and the Web3 ecosystem expands, blockchain-based digital identity will no longer be an exotic experiment but an essential infrastructure. It paves the way for a safer, more private, and user-centric world where you are the full owner of your identity.