Decentralized Identifiers: Top Web3 ID Projects Transforming the Crypto Industry in 2024

Why Web3 ID is Gaining Attention

In recent years, decentralized identification technologies (DID) have moved from niche to mainstream. The milestone was the launch of Worldcoin in 2023, which drew investor and user attention to the potential of self-sovereign Web3 IDs. Today, this field is actively developing: from biometric solutions to zero-knowledge proof-based protocols.

Every day, thousands of new addresses are created on the blockchain, but few remember them. That’s why decentralized identification projects are so important—they give a face to your Web3 presence, maintaining privacy and control.

How Decentralized Web3 IDs Work

The essence is simple: instead of trusting your data to companies like (Facebook, Google, banks), you own your digital identity through a cryptographic key pair. The public key is your name in Web3, the private key is a code lock that you never show anyone.

The blockchain acts as a tamper-proof database where all Web3 IDs are registered. This guarantees that one person cannot have multiple identities and receive benefits multiple times (problem known as “one person — one account”).

Cryptography ensures that only you control your data, even when interacting with different platforms. No centralized organization can block or seize your identity.

Why the Market Needs Decentralized Web3 IDs

In DeFi, they solve trust issues. Each transaction is linked to a verified identity, but without revealing personal data. This reduces fraud risk and makes platforms more reliable.

In the broader crypto community, decentralized IDs simplify life—no need to go through KYC on each platform again; you can use a single Web3 ID.

From a regulatory perspective, it’s a tool to meet AML/KYC requirements without compromising user privacy. The balance between security and anonymity becomes truly achievable.

Worldcoin: Biometrics in Web3 ID

Current stats: $0.50 per WLD token (24h: +0.30%), market cap $1.28B.

Worldcoin stands out by using iris scanning to create a unique Web3 ID. It’s not just a digital identifier—it’s a guarantee that you are a real person, not an algorithm.

World ID is already integrated with Ethereum, Optimism, and Polygon. The Tools for Humanity team is preparing its own Layer-2 network—World Chain—that will rethink the blockchain industry, focusing on interaction with people rather than bots.

Discussions are underway about partnerships with PayPal and OpenAI—if they materialize, the scale of Web3 ID usage for Worldcoin could multiply.

Strengths:

• Innovative biometric approach
• Global accessibility, even for unbanked populations
• Potential for universal basic income

Weaknesses:

• Privacy concerns regarding biometric data collection
• Regulatory challenges in different countries

Lifeform: Avatars as Web3 ID

Company valuation: $300 million (just completed Series B funding). Raison d’être of Lifeform is to connect hyper-realistic 3D avatars with decentralized identification.

Over 3 million unique addresses already use the platform. The company integrates Web3 ID into Web2 social networks, creating a bridge between virtuality and reality.

Advantages:

• Cutting-edge cryptography for identity protection
• Ease of use from anywhere in the world
• Simplified verification process

Challenges:

• Vulnerability to cyberattacks (like any data storage)
• Requires specialized knowledge for implementation
• Compatibility across regions is non-trivial

Polygon ID: Privacy Through Mathematics

Polygon ID uses zero-knowledge proofs (ZKPs) to create Web3 IDs without compromising privacy. You can prove you are 18 without revealing your birth date. You can hold tokens without showing your balance.

In February 2024, Human Institute announced a partnership with Polygon Labs and Animoca Brands on Humanity Protocol—using palm recognition for secure Web3 experiences. In April 2024, Polygon launched a ZKP-based identification protocol.

Strengths:

• Maximum privacy
• Scalability
• Integration with the Ethereum ecosystem

Weaknesses:

• Relatively new product
• Integration complexity for developers

Ethereum Name Service: Human Names Instead of Addresses

Imagine: instead of sending tokens to 0x742d35Cc6634C0532925a3b844Bc9e7595f34bE0, you just write alice.eth. Ethereum Name Service makes Web3 IDs accessible to ordinary people.

In February 2024, ENS partnered with GoDaddy to connect ENS names to traditional web domains. In April, it integrated .box domains (the first on-chain TLD approved by ICANN).

Pros:

• Convenience — it’s the main advantage
• Wide adoption in the community
• Universal applicability

Cons:

• Limited by Ethereum’s performance
• Scalability remains an issue

Space ID: A Single Web3 ID for All Blockchains

Space ID addresses fragmentation: instead of a separate ID on each network, you register one name that works everywhere. From DeFi to NFT marketplaces—one Web3 ID for everything.

Features:

• Cross-chain functionality
• Ease of use
• Wide range of applications

Limitations:

• Competition with other domain services
• Still not widely adopted outside crypto communities

Galxe: Reputation as Part of Web3 ID

Galxe uses account activity data to create a decentralized credential network. Your Web3 reputation becomes a verifiable asset: how much you participated in DAOs, which smart contracts you used, your interaction history.

This opens doors for access control systems (who can join private DAOs, get credit in DeFi, buy limited NFTs).

Pros:

• Innovative use of activity data
• Large potential for application

Cons:

• Early development stage
• The idea still needs to be popularized

Challenges of Decentralized Web3 ID

Implementation requires re-education. Users are accustomed to passwords and two-factor authentication. Managing a private key is a whole different story. Losing the key = losing access to your identity. Forever.

Technical complexity should not be a barrier. Interoperability between different blockchains remains an unresolved issue. Each project uses its own Web3 ID standards.

Regulation remains uncertain. GDPR requires data to be deletable. But if data is on the blockchain, it cannot be deleted. How to reconcile this?

New vulnerabilities emerge as the technology develops. Decentralization reduces the risk of a single point of failure but creates other issues: how to protect private keys from phishing?

The Future of Decentralized Web3 ID Industry

Mass adoption. As awareness grows, DeFi, NFT marketplaces, and DAOs will require decentralized Web3 IDs by default. It will become the standard.

Enhanced privacy. Zero-knowledge proofs will become more accessible and faster. Biometric systems will improve.

Cross-chain Web3 IDs. A single identifier working on Bitcoin, Ethereum, Solana, and others. This will require huge standardization efforts, but the payoff is worth it.

KYC/AML via decentralization. Regulators will realize that DID is not a threat but a tool. When governments start requiring Web3 IDs to access DEXs, even skeptics will agree.

Expansion beyond crypto. Healthcare, e-governance, IoT—everywhere, secure identification is needed. Integrating DID with AI and IoT devices will create an ecosystem where each device has its own Web3 ID.

Summary

Decentralized Web3 IDs are not just another trend. They represent a shift from corporate control to user sovereignty. You will become the owner of your digital identity, without fear that a company will block access or sell your data.

The technology is still young, standards are not finalized, regulation is vague. But the direction is clear. In the coming years, Web3 IDs will become as integral to life as passports today—only safer, more private, and owned by you.