Why Web3 Needs a Native Identity Layer, Not Plugins

Airdrop farming has evolved into a multi-billion dollar extractive industry. Projects like EigenLayer and Starknet burned ~$100M+ in gas on empty claims, while sophisticated farms capture >30% of token supply. Native identity flips the script, making reputation a stakable asset.

• Sybil Cost: From ~$0.10 (botnet) to >$10,000 (staked reputation)
• Signal Recovery: 90%+ of airdrop value retained by real users

TVL-weighted voting is fundamentally broken. A $10B+ DAO can be controlled by a few anonymous addresses, as seen in early Compound and Uniswap governance attacks. Native identity enables one-human-one-vote systems or proof-of-personhood quadratics, shifting power from capital to consensus.

• Attack Cost: From borrowed capital to forged humanhood
• Defense: Gitcoin Passport, Worldcoin, BrightID as primitive attempts

Bolt-on solutions like Discord roles and Google OAuth are single points of failure. They create data silos and reintroduce Web2 trust assumptions. A native layer, like Ethereum Attestation Service (EAS) or Verax, provides a portable, sovereign graph of trust.

• Failure Rate: 100% reliance on external uptime
• Native Benefit: Composable reputation across DeFi, DAOs, Gaming

Every new dApp treats users as strangers, forcing them to rebuild credit from zero. This wastes ~$1B+ annually in redundant KYC and onboarding friction. A native identity layer enables portable credit scores and under-collateralized lending, unlocking true DeFi 2.0.

• Cost: $50-100/user in redundant verification
• Opportunity: $1T+ in uncollateralized credit markets

Relying on OAuth or Sign-in with Apple reintroduces centralized points of failure and censorship. These platforms can de-platform apps and users at will, violating web3's core tenets.

• Single Point of Failure: A Google outage breaks login for thousands of dApps.
• Censorship Risk: Account suspension severs a user's entire on-chain identity and asset access.
• Data Exploitation: Behavioral data from logins is monetized by the platform, not the user.

Isolated plugins like Lens Protocol or ENS profiles create walled gardens. Reputation and history from one app don't port to another, stifling innovation and user lock-in.

• Zero Network Effects: A user's Gitcoin Passport score is meaningless on a gaming dApp.
• Developer Burden: Each app must rebuild identity verification, a ~6-month engineering sink.
• User Friction: Managing multiple profiles and keys defeats the purpose of a unified identity.

The current EOA/MPC wallet model is a usability and security disaster. Users face seed phrase loss and approval fatigue, leading to $1B+ annual theft. Plugins don't solve the root cause.

• Key Management Burden: ~40% of new users lose access within the first year.
• Approval Sprawl: A single malicious site can drain assets across dozens of allowances.
• No Native Recovery: Social recovery plugins are afterthoughts, not protocol-level features.

On-chain identity actions (minting SBTs, updating profiles) compete with DeFi for block space, making them prohibitively expensive. This limits identity to whales and kills mass adoption.

• Prohibitive Cost: Minting a simple proof can cost $50+ on Ethereum L1.
• Network Congestion: Identity updates get priced out during NFT mints or airdrops.
• No Micro-Transactions: Frictionless, frequent reputation updates are economically impossible.

Current systems like Ethereum expose all activity and linkages on a public ledger. A native layer must provide selective disclosure (e.g., via zkProofs) by default, which plugins cannot enforce.

• Doxxing by Design: A single on-chain action can link all your wallets and assets.
• No Compliance Tools: Impossible to prove KYC status without revealing full identity.
• Plugin Leakage: Privacy plugins become optional and are rarely used, creating a false sense of security.

Identity logic baked into dApps (Uniswap, Aave) creates redundant work and incompatible standards. A native protocol layer (like Ethereum for settlement) is needed to unlock account abstraction, intent-based systems, and new primitives.

• Reinventing the Wheel: Every DeFi, gaming, and social app builds its own reputation system.
• Stifled Abstraction: ERC-4337 account abstraction cannot reach full potential without a universal identity primitive.
• Zero Native Intents: Users cannot express "get me the best rate" without a portable identity to manage complexity.

Every external auth call to a centralized OAuth provider or a siloed Web2 service is a performance and reliability tax. This creates systemic fragility.

• ~300-500ms latency per auth round-trip, killing DeFi arbitrage and gaming responsiveness.
• Dependency on external uptime; your dApp fails if Google Auth or Discord's API is down.
• No native session management, forcing users to sign every transaction.

Plugins create data silos. A user's reputation from Aave cannot inform their credit limit on Compound. A Uniswap LP's history is invisible to a GMX vault. This stifles innovation.

• Zero cross-protocol state sharing without cumbersome, insecure oracle bridges.
• Forces re-verification for each new dApp, a terrible UX that hinders adoption.
• Kills advanced primitives like undercollateralized lending or sybil-resistant governance.

Relying on Discord for roles or Github for developer credentials centralizes trust. These are attack vectors, not solutions.

• Single point of failure/compromise: A hacked admin bot can mint unlimited "verified" identities.
• No user sovereignty: The platform can revoke access or change rules arbitrarily.
• Contradicts crypto's trust-minimization ethos, reintroducing the very intermediaries we aimed to remove.

The native fix is an ERC-4337 smart account with a verifiable credential stack (EIP-712, EIP-1271). Identity becomes a programmable, on-chain object.

• Session keys enable gasless, batched interactions across Uniswap, Aave, and Opensea.
• Portable attestations from EAS or Verax create a shared, sovereign reputation layer.
• Protocols query a user's aggregated identity state in a single, permissionless call.

For maximal privacy and scale, the endpoint is a ZK-based identity layer like zkEmail or Sismo. This moves verification off-chain while preserving proof.

• Selective disclosure: Prove you're over 18 or accredited without revealing your DOB or SSN.
• Sybil-resistance via proof-of-personhood (e.g., Worldcoin, BrightID) without biometric data leaks.
• Enables private DeFi, compliant on/off-ramps, and fraud-resistant airdrops.

Native identity isn't a cost center; it's the gateway to massive new markets currently locked out by plugin limitations.

• Undercollateralized Lending: Use on-chain cash flow (e.g., Goldfinch model) with verifiable identity, unlocking $10B+ in institutional capital.
• Governance 2.0: Sybil-resistant, reputation-weighted voting for Compound, Uniswap DAOs.
• Fully On-Chain Games: Persistent player identity and asset portability across game worlds.