The need to keep a database that stores and manages users’ identities on the web3 ecosystem have become expedient. A decentralized database could be accessed across all decentralized platforms and linked to ensure data privacy, security, and unique Identity. These are what prompted the upscaling of Decentralized Identity (DID).
Understanding Decentralized Identity (DID)
The Decentralized Identity is based on a trusted framework in the blockchain/ web3 network. It is built for identity management.
Users of web3 will be able to use the Decentralized Identity to generate, manage, and control their personally identifiable information (PII) without a centralized party.
Decentralized Identity contains individual details such as name, age, address, biometrics, credit card account & history, etc. Other secondary details, such as usernames, passwords, search history, etc., would also be included.
Different web3 protocols will have their Decentralized identity management system that will enable easy interaction between users and the network.
Decentralized Identity in DeFi Adoption
One of those key ingredients to the mass adoption of decentralized finance (DeFi) is the decentralized Identity. Since more financial services are being transferred to blockchain technology, the DID becomes important to help validate the identities and keep them consistent across all DeFi platforms. Decentralized Identity is therefore considered a key infrastructure to the success of DeFi.
One of those industry players that has keyed into the DID infrastructure is Quadrata. Known for developing blockchain protocols and tools, Quadrata will provide a web3 identity solution.
This decentralized identity solution will enable blockchain users to comply with “Know Your Customer” (KYC) without revealing their data to third parties.
Fabrice Cheng, the Chief executive officer and co-founder of Quadrata, emphasized that the prominent driver for decentralized Identity would be users and stakeholders of web3 protocols.
To improve customer service and experience, web3 protocols such as Decentralized finance will require users’ DID and prompt those users to have one.
So when a user satisfies all conditions, and the user’s Decentralized ID has been verified, it will issue a proof of Identity. While this proof of Identity varies between protocols and identity management systems, Quadrata uses Quadrata passports. The passport is represented as a Non-fungible token (NFT).
Recently, Quadrata partnered with Polygon, an Ethereum layer-2 scaling solution. The partnership led to the integration of its web3 passport network.
Instead of the traditional identity management system, the DID is more secure and gives verifiable proof of existence to all users.
The Digital identity is easy to set up and gives a brighter future to DeFi. The hassles of verifying and validating your identities whenever you need to make financial transactions will no longer be necessary.