The identity-first path to decentralization

Disclosure: The views and opinions expressed here are solely those of the author and do not necessarily represent the views and opinions of crypto.news editorial.

We have a people problem at Web3. Unfortunately, despite the promise of decentralization and data ownership, platforms still don’t communicate with each other very well. As a result, deep-seated issues such as identity management, data sovereignty, and privacy continue to plague our emerging industry.

Therefore, the key to unlocking the true potential of web3 is a unified framework that eliminates data separation and provides decentralized identity with strong privacy protections. This approach proposes a win-win for both sides of the stakeholder equation. Users benefit from cross-chain identity, data monetization, and a unified sense of self. Meanwhile, businesses gain access to rich and verified user data while maintaining privacy and compliance. Even better, this identity-first path to decentralization enables other new capabilities like on-chain reputation systems, off-chain logins, and AI data usage.

In the early days of Web3, one thing is becoming increasingly clear: To build decentralized ecosystems properly, we must get identity right. Let’s explore how we can best connect people and platforms in this brave new world of the internet.

A win-win for users and businesses

Take a closer look and you’ll realize that fragmented identities and disconnected data sovereignty hinder interoperability on both the new and old internet, leaving users with disorganized information in the digital environment. This lack of integration limits trust building and creates inefficiencies in industries where consistent data is important, from advertising to artificial intelligence.

These problems are all very familiar. Web2 social media giants and search groups centralize identities but fail to connect them across platforms. Conclusion? Siled, static profiles owned by platforms, not people. Web3 promises a solution: decentralized, interoperable identities owned by individuals. However, putting this into practice is quite challenging.

While Web3 has improved over its predecessor, true interoperability and seamless identity management remain elusive. But emerging protocols tackle this problem head-on. Projects like LayerZero, which aims at Omnichain interoperability, and Gitcoin Passport, which focuses on open-source authentication, are just two of the projects paving the way.

As a result, the identity and data layer is becoming a core part of the web3 stack, and protocols and platforms can better deliver digital identity management, on-chain reputation building, and data sovereignty.

As mentioned earlier, this new reality benefits both users and businesses. Users can better connect with their online identity by owning, managing and monetizing their personal data. They can also interact with dApps in a more secure and private way. CARV ID, powered by ERC-7231, exemplifies this by allowing web3 players to aggregate and manage on-chain wallets and off-chain accounts in one place.

For businesses, identity and data layers improve targeting, decision-making, and remarketing by providing access to verified and (most importantly) consenting user data.

Better data, better results

The benefits don’t end there. Federated identity supports a set of applications that enhance the experience of individuals and the ecosystem. For example, on-chain reputation systems allow users to establish and maintain credibility across various web platforms, while off-chain logins allow games and applications to provide data access regardless of where they live. Moreover, truly interoperable decentralized identities facilitate secure account recovery; This is a very significant advancement for blockchain-based wallets that addresses a long-standing problem.

Identity and data solutions also open the door to other new possibilities. Privacy-preserving advertising is made possible when users can sign up and choose to monetize their information on their own terms. As AI becomes more pervasive and data-hungry, decentralized identities enable model training that delivers personalized experiences while preserving privacy.

After all, better data yields better results. This identity-first path to centralization promotes consistency across platforms and creates a more intuitive and empowering online experience for everyone.

Identity and user’s internet

Today, there is no difference between identity and digital identity. Working, socializing, gaming and other aspects of modern life increasingly take place online. Therefore, who we are and how we express ourselves must be interconnected through web3. Similarly, our online contributions should be rewarded (especially when used by companies for data extraction and private profit).

Consensus found in its annual web3 survey that 79% of respondents want more control over their identity online. At the same time, 38% of global respondents believe they are compensated enough for the value and creativity they bring to the Internet.

These two ideas (identity control and fair compensation) are inherently linked. When people truly own their identities and can decide how to share or monetize their data, they will naturally be more fairly compensated for their digital contributions. This alignment is the basis for creating a user-owned internet that values ​​individuals rather than corporations.

It’s simple: Future-proof protocols and platforms put people first. If we can connect people to platforms that prioritize privacy, scalability, and interoperability, we have a much better chance of changing the digital status quo. Whether you’re a user, developer, or business leader, now is the time to engage and shape this future. Let’s take this and build an internet that truly is made by the people, for the people.

Yukai Tu

Yukai Tu is CARV’s chief technical officer. Tu is an expert in confidential computing and blockchain and holds a master’s degree in computer science from UCLA. Yukai integrates more than 900 gaming and AI companies at CARV, helping build the largest decentralized identity and data layer for gaming, AI, and beyond. He has also worked as a software engineer at Google and Coinbase, contributed to the Cosmos SDK, and worked as a blockchain engineering lead at LINO Network.