Decentralized Identifiers: Which DID Projects Are Leading the Crypto Market in 2024

The development of Web3 has led to the emergence of a new paradigm in digital identity management. After the launch of Worldcoin (WLD) in 2023, investors and users paid serious attention to the decentralized identifiers sector. The current price of WLD is $0.50, and the market capitalization has reached $1.29B, indicating growing interest in this asset category.

Why Decentralized Identifiers Are Becoming Critically Important

In the Web3 ecosystem, every user needs a reliable way to verify identity without intermediaries. Decentralized identifiers are the answer to the challenges of the digital age, where user privacy and autonomy come to the forefront.

The difference from traditional systems is obvious: instead of trusting your data to corporations and government institutions, you gain full control over your digital identity. This is not just technological progress — it’s a rethinking of the relationship between the user and digital infrastructure.

The role of decentralized identifiers in DeFi is invaluable. Protocols for lending, DEX, and other financial applications require a verifiable and secure authentication method. Here, DID provides an advantage: they link each transaction to a verified identity without revealing sensitive information.

How Decentralized Identifiers Work

At the core of DID is a cryptographic system with a pair of keys: public and private. Your public key openly serves as your identifier on the blockchain, while the private key remains secret and is used to manage access to data.

The blockchain acts as an immutable database where DID records are stored. This eliminates the need for centralized data storage and significantly enhances resistance to fraud and cyberattacks.

The mechanics are as follows: the user generates a cryptographic pair, registers the public key on the blockchain, and can now interact with any platforms requiring verification. An important point — identity management occurs exclusively on the user’s device, without third-party involvement.

Key Advantages of Decentralized Identifiers

Full control over personal data
You decide who and what to disclose about yourself. Third parties can no longer monopolize your information.

Protection against data leaks
The absence of a single central storage means that hacking one service’s system will not lead to the compromise of all your data.

Cross-blockchain universality
One decentralized identifier works on Ethereum, Polygon, Optimism, and other networks without the need for re-registration.

Resource savings
Eliminating intermediaries in verification reduces costs for organizations and speeds up identity confirmation.

Leading DID Projects in 2024

Worldcoin: biometric approach to identification

Worldcoin has chosen an innovative path, using iris scanning to create a unique World ID. This approach guarantees the principle “one person — one account” and prevents fraud using multiple accounts.

World ID integration covers leading blockchain networks: Ethereum, Optimism, and Polygon. The Tools for Humanity team is developing World Chain — a Layer-2 network based on Ethereum, focused on interaction with real people rather than automated bots.

Current metrics: Worldcoin (WLD) is traded at $0.50 with a daily volatility of -0.20%. Market cap of $1.29B reflects the project’s position as one of the most capitalized in the DID sector. Daily trading volume reaches $1.44M.

Expansion prospects include partnerships with major financial sector and AI industry companies, although details of such collaborations remain under negotiation.

Strengths: Innovative approach, emphasis on inclusivity, global reach.
Challenges: Privacy concerns regarding biometric data, implementation difficulties in different countries.

Lifeform: 3D avatars as the basis for DID

Lifeform offers a unique solution combining hyper-realistic 3D avatars with decentralized identity protocols. The company recently completed a Series B funding round, attracting investments led by IDG Capital.

The project’s financial history is impressive: $15M in the initial round, $100M in Series A, and a current valuation of $300M. The active user base exceeds 3 million unique addresses.

Integrating digital avatars into the Web2 social media ecosystem creates a bridge between traditional internet and decentralized Web3. Users gain tools for independent management of their digital identities with enhanced security.

Advantages: Modern encryption, ease of use, optimized user experience.
Disadvantages: Potential vulnerability to cyberattacks, requirement for specialized knowledge for implementation, complexity with cross-platform compatibility.

Polygon ID: privacy through zero-knowledge proofs

Polygon ID uses advanced cryptographic techniques — zero-knowledge proofs (ZKP) — to create a decentralized identification system that maximizes user privacy.

The platform allows managing credentials on the user’s device and logging in without a password, while securely exchanging information. Developers can efficiently embed verification processes into decentralized applications.

In 2024, Human Institute announced a partnership with Polygon Labs and Animoca Brands to develop Humanity Protocol, which uses palm biometrics. Additionally, Polygon launched its own identification protocol based on ZKP.

Strengths: Enhanced privacy, scalability, Ethereum compatibility.
Weaknesses: Relatively new product on the market, integration challenges.

Ethereum Name Service: accessible identification

Ethereum Name Service converts complex hexadecimal addresses into readable names like “alice.eth,” greatly improving user experience within the Ethereum ecosystem.

In February 2024, ENS announced a partnership with GoDaddy, enabling users without technical knowledge to connect ENS names to web domains. Since April 2024, the platform supports .box domains, approved by ICANN as top-level domains — this is the first on-chain TLD in the ENS manager application.

Pros: Ease of use, broad community recognition, universal utility.
Cons: Ethereum’s throughput limitations, scalability issues.

Space ID: cross-chain namespace

Space ID provides a universal solution for registering and managing domain names across various blockchains. It ensures true cross-chain compatibility and creates a unified user identifier across the entire Web3 ecosystem.

The project supports a wide range of applications — from cryptocurrency trading and lending to NFT ecosystems, demonstrating versatility.

Advantages: Improved compatibility, intuitiveness, diverse applications.
Disadvantages: Competition from other naming services, limited adoption outside the crypto community.

Galxe: credentialing based on account data

Galxe builds a decentralized credential infrastructure using account information to create verifiable credentials. The platform is designed for reputation systems, access management, and other applications in Web3.

Galxe’s architecture is open and extensible, allowing the developer ecosystem to create various use cases.

Strengths: Innovative approach to data processing, broad potential applications.
Weaknesses: Early development stage, challenges in large-scale adoption.

Main Challenges in Implementing DID

Transition period requires mass retraining
Users and organizations are accustomed to centralized identification systems. Transitioning to a decentralized approach requires cultural and technological transformation.

Technical complexity and interoperability
Different blockchains use incompatible standards. Ensuring interoperability remains a critical task requiring coordinated efforts among multiple stakeholders.

Key management as a new responsibility
Losing a private key means losing access to the identity. This places new responsibility on users, which not everyone is ready to handle.

Legal ambiguity and regulation
Legislation in different countries varies regarding decentralized identification. Balancing compliance with regulatory requirements and maintaining decentralization is a complex challenge.

Future Directions for DID Development

Mass adoption in major applications
As awareness of DID grows, they will be integrated into DeFi, NFT platforms, and DAOs to ensure security and transparency.

Evolution of cryptographic methods
Advances in zero-knowledge proofs and biometric systems will provide new levels of privacy without sacrificing convenience.

Cross-chain unification
DID systems will evolve toward a single identifier functioning across multiple blockchains.

Integration of KYC/AML and regtech
Tightening regulations will promote the use of DID for compliance while preserving privacy.

Expansion beyond the crypto sector
IoT, healthcare, digital governance, and AI systems will adopt decentralized identifiers to enhance security and autonomy.

Conclusion

Decentralized identifiers represent a fundamental shift in how digital identity is managed. Projects like Worldcoin, Lifeform, Polygon ID, Ethereum Name Service, Space ID, and Galxe demonstrate the diversity of approaches to solving identity issues in Web3.

The development of this sector paves the way for a safer, more private, and user-centric digital world. As technology advances and organizational and legal obstacles are overcome, decentralized identifiers will become an integral part of Web3 infrastructure and will then expand into all other areas of digital interaction.