Earlier in this series, I wrote about on‑chain identity: ENS names, soulbound tokens, and the idea of a "Web3 resume" that follows you across apps and protocols. You can read that piece here: On‑Chain Identity — ENS, Soulbound Tokens & Your Web3 Resume. At the time, identity felt like a nice‑to‑have feature, something that made wallets more human and gave protocols a way to recognize repeat users. Now that I am 45 days into this journey and have covered DeFi, stablecoins, zero knowledge proofs, regenerative finance, and DePIN, identity looks very different to me. It is not just "your name on chain," it is the trust and reputation layer that holds everything else together.
This is Day 45 of my 60 Days of Web3 experiment. If you are new here, you can read the full journey on Medium, checkout Ribhav on Future, and hang out with us in the Web3ForHumans Telegram at Web3ForHumans.
Quick rewind: what on‑chain identity looked like early in the series
When I first wrote about identity, the building blocks were simple. You had ENS, which lets you turn a long wallet address into a human readable name like ribhav.eth. You had soulbound tokens or SBTs, which are non transferable NFTs that represent credentials, memberships, or achievements tied to a specific wallet. And you had attestations, on chain claims that someone or something vouches for a fact about you, like "this person completed a course" or "this wallet interacted with this protocol."
The pitch was: instead of fragmented profiles across Web2 platforms, you could have one portable identity that you own and control. Your reputation, credentials, and history follow you from app to app, and you decide what to share or hide. It felt futuristic and philosophically clean, but also a bit abstract. What does it actually unlock? When does it matter?
Now, after covering DeFi, regenerative stablecoins, DePIN, and zero knowledge proofs, I am starting to see identity not as a standalone feature but as the glue that lets all those other pieces work without falling apart or relying on centralized gatekeepers.
Where identity plugs into DeFi and regenerative finance
Let me start with DeFi, since we spent time on that in Day 17 stablecoins, Day 42 regenerative stablecoins, and yesterday's Day 44 piece on DeFi meeting the physical world. Early DeFi was radically open: anyone with a wallet could lend, borrow, or provide liquidity, no questions asked. That openness is powerful, but it also makes certain things hard or impossible.
For example, under collateralized lending. If I want to borrow money without locking up 150% of the loan value in volatile crypto, the lender needs some reason to trust that I will pay them back. In traditional finance, that reason is credit history, income verification, and legal recourse. In DeFi, we do not have those by default. But we could have on chain reputation and credentials. If my wallet has attestations showing that I have repaid loans before, contributed to DAOs, built projects that shipped, or earned credentials from trusted institutions, a lending protocol could use that signal to offer better rates or lower collateral requirements.
Now add zero knowledge proofs, which we covered in the ZK day earlier in the series. I could prove "I have a credit score above 700" or "I am a resident of an eligible country" without revealing my actual score, name, or address. Identity becomes a way to bring real world trust into DeFi without sacrificing privacy or decentralization.
The same logic applies to regenerative finance and impact backed stablecoins like AZUSD from Day 42. If a protocol claims its reserves are funding renewable energy or verified carbon credits, who verifies that claim? You need trusted parties, registries, auditors, or on chain attestations that certify "this asset meets green standards" or "this project removed X tons of carbon." Identity systems give you a way to track who is vouching for what, and whether they have a credible reputation or a history of gaming the system.
Where identity matters for DePIN and physical infrastructure
DePIN, decentralized physical infrastructure networks, is another place where identity becomes critical. We talked about DePIN in Day 43, where protocols like Helium, Hivemapper, and Render reward people for running hotspots, dashcams, or GPU nodes. The big design challenge in DePIN is measuring useful work and filtering out spam or fake activity.
For example, if Helium pays rewards based on wireless coverage, how do you stop someone from setting up fake hotspots that claim coverage but do not actually provide it? Or if Hivemapper pays for dashcam footage of streets, how do you prevent someone from submitting the same loop of road over and over? The protocol needs some way to distinguish good actors from bad actors, and that is where identity and reputation come in.
If hardware operators have an on chain identity tied to their devices, and that identity accumulates reputation over time, the protocol can weight rewards accordingly. Long term contributors with clean records get more trust and better incentives. New or suspicious actors get lower rewards or extra scrutiny until they prove themselves. This is not perfect, but it is a lot better than pure anonymity where every wallet looks identical.
You could also layer in economic identity, things like staking or slashing. If you want to run a DePIN node, you stake tokens tied to your identity. If you provide bad data or fake coverage, you lose your stake and your reputation takes a hit. That creates skin in the game, which is one of the few reliable ways to align incentives in an open system.
Identity as access control and compliance without centralized gatekeepers
Here is another angle I did not fully appreciate until now. A lot of Web3 projects want to stay permissionless and decentralized, but they also need to comply with real world regulations or protect against certain abuses. For example, a DeFi protocol might need to block users from sanctioned countries, prevent Sybil attacks where one person controls many wallets, or verify that users meet accredited investor requirements.
Traditional Web2 solutions involve KYC, which means handing over your passport, address, and personal data to a centralized company. That data can be leaked, sold, or misused, and it creates a single point of failure and control. On chain identity plus zero knowledge proofs offer a different path. You prove you meet the requirements without revealing the underlying data, and that proof is tied to your wallet or identity, not stored in some company's database.
For example, a protocol could require that wallets have an attestation from a trusted verifier saying "this user passed KYC and is not on a sanctions list," but the verifier does not know which wallet belongs to which person, and the protocol does not see the raw personal data. The user stays pseudonymous, the protocol stays compliant, and there is no honeypot of sensitive information sitting on a server waiting to be hacked.
This same pattern applies to other access control problems. DAOs that want to give voting power only to real humans, not bots, could rely on proof of personhood schemes tied to identity. Airdrops that want to reward genuine users, not farmers, could check for on chain credentials or reputation signals. Reputation and identity become the lever that lets systems stay open by default but still filter out bad actors when needed.
My own Web3 identity after 45 days
On a personal level, 45 days into this journey, my own on chain identity is starting to feel less theoretical and more like something I am actively building. I have published 45 articles as part of this series, I am active in a few communities, and I have interacted with DeFi protocols, testnets, and developer tools. All of that is scattered across Medium, Future, GitHub, Twitter, Telegram, and a few wallets, but in theory it could be tied together into a portable Web3 resume.
If I wanted to apply for a DevRel role, a grant, or a DAO contributor position, I could point to on chain proof of what I have built and written. If I wanted to borrow against future earnings or get access to a private beta, I could use attestations or soulbound tokens as credibility signals. None of that exists in a clean, plug and play way yet, but the pieces are starting to show up in the wild, and I can see how they fit together.
The mental shift for me is this: identity is not just "your profile." It is the reputation, trust, and access layer that makes decentralized systems practical instead of purely theoretical. Without identity, you are stuck with either radical openness that attracts spam and abuse, or centralized gatekeepers that reintroduce all the problems Web3 is trying to solve.
The hard parts: privacy, portability, and who controls the narrative
Of course, on chain identity is not all upside. There are real risks and open questions that anyone building or using these systems should think through.
Privacy is the big one. If your entire history, credentials, and reputation are tied to one wallet and that wallet is public, anyone can see everything you have ever done. That could be fine for professional identity, but terrible for personal privacy. You might want different identities for different contexts, or you might want to selectively reveal only certain credentials. Zero knowledge proofs help, but they add complexity and are not widely supported yet.
Portability and interoperability are also tricky. Right now, most identity systems are siloed. An ENS name works on Ethereum, but not necessarily on Solana or Polygon. A soulbound token issued by one DAO might not be recognized by another. Attestations from one verifier might not be trusted by a different protocol. We do not yet have clean standards or bridges that let identity flow across chains and apps the way we want.
And then there is the question of who controls the narrative. If on chain identity is just a record of what you did, who decides what counts as good reputation versus bad? If a protocol slashes your stake or a verifier revokes an attestation, do you have recourse? What happens if your identity gets tied to activity you did not actually perform, because your wallet was compromised or someone spoofed your credentials? These are governance and security problems that do not have obvious answers yet.
Where identity sits in my Day 45 mental map
By Day 45, my internal Web3 map has a few clear layers, and identity is starting to feel like the horizontal layer that cuts across all the others. At the bottom you have blockchains and infrastructure. On top of that you have the financial layer, DeFi and stablecoins. Then you have the data and storage layer, things like The Graph and IPFS. Then the physical layer, DePIN. And somewhere in between all of those, you have identity and trust.
Identity is what lets DeFi move beyond over collateralized loans and start experimenting with credit and reputation. It is what lets DePIN filter spam and reward good actors. It is what lets regenerative projects verify impact without relying on one centralized auditor. It is what lets protocols comply with regulations without forcing everyone through invasive KYC. And it is what lets individuals build portable reputations that they own instead of platforms owning them.
This is not a solved problem. Most of the identity infrastructure is still experimental, fragmented, and hard to use. But the more I learn, the more I see identity as one of the core missing pieces that Web3 needs to get right if it is going to scale beyond speculation and actually support useful applications.
Resources
Here are a few pieces that shaped how I think about on chain identity, reputation, and the trust layer.
Decentralized Identity: What It Is and Why It Matters – Ethereum.org
Soulbound Tokens and the Future of Identity – Vitalik Buterin
Zero Knowledge Proofs for Privacy Preserving Identity – zkID
How On Chain Reputation Could Transform DeFi – Bankless
Gitcoin Passport: Proof of Personhood and Reputation
If you know other good resources, tools, or projects working on decentralized identity and reputation, feel free to share them. I am still learning how all these pieces fit together.
If you are on a similar Web3 learning path
This note is part of my public 60 Days of Web3 journey, one concept per day, explained in human terms, with all the confusion and course corrections left in. You can read the full journey on Medium, follow Ribhav on Future, and join the community on Telegram at Web3ForHumans.
If something here feels off, incomplete, or sparks an idea, reply, quote it, or write your own version. I am learning in public so you do not have to do it alone.
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