Why Identity Silos Are Incompatible with a Multi-Chain World

Identity silos are friction multipliers. Every new chain forces users to create a new identity, manage separate credentials, and rebuild reputation from zero, directly contradicting the seamless interoperability promised by protocols like LayerZero and Axelar.

Portable identity is a first-principles requirement. A user's social graph, transaction history, and on-chain credentials are assets. Locking them to a single L1 or L2 like Ethereum or Arbitrum creates systemic inefficiency, akin to needing a new passport for every city.

The evidence is in the UX. Users tolerate managing 10+ seed phrases because no standard exists. Projects like ENS demonstrate demand for a universal namespace, but they remain largely unresolved at the application layer for reputation and attestations.

Composability requires a universal state layer. A user's reputation, assets, and permissions must be portable across chains like Arbitrum and Base. Without this, each chain becomes a walled garden, forcing protocols like Aave and Uniswap to rebuild user bases from scratch on every new network.

Siloed identity fragments liquidity and capital efficiency. A user's collateral on Ethereum cannot natively secure a loan on Avalanche, forcing over-collateralization across chains. This inefficiency directly contradicts the capital-light promise of DeFi and hinders protocols like Compound and MakerDAO.

The current workaround is unsustainable. Users manage dozens of private keys and wallet addresses, a UX failure that centralizes power with custodians and large bridge operators like LayerZero and Wormhole. This recreates the very custodial risks blockchain aims to eliminate.

Evidence: The proliferation of over 100 EVM chains has not created 100x more usable liquidity; it has scattered it. Bridging volume, while high, is a symptom of the disease—a costly, insecure patch for a broken identity primitive.

Identity silos fragment user capital. A user's on-chain reputation and credentials on Ethereum are inaccessible on Solana or Arbitrum, forcing redundant verification and limiting DeFi composability.

ZK proofs create a portable identity layer. Protocols like Polygon ID and Sismo generate verifiable credentials that prove attributes (e.g., KYC status, governance power) without revealing the underlying data, enabling cross-chain verification.

This solves the bridge trust problem. Instead of locking assets in a canonical bridge like Arbitrum's, a user proves ownership of an Ethereum NFT via a ZK proof to mint a wrapped version on Base using a permissionless bridge like LayerZero.

Evidence: Ethereum's ERC-4337 account abstraction standard natively supports signature aggregation and verification, providing the foundational infrastructure for portable ZK-based session keys across EVM chains.

Silos create user experience debt. Managing separate profiles for Lens, ENS, and Worldcoin fragments a user's on-chain persona, increasing cognitive load and transaction friction across chains like Arbitrum and Base.

Interoperability is a non-negotiable standard. The success of cross-chain messaging (LayerZero, Wormhole) and intents (UniswapX) proves the market demands seamless, chain-agnostic systems; identity cannot be the exception.

Silos hinder composability. A DeFi protocol on Polygon cannot natively verify a user's Solana reputation, stunting the development of truly cross-chain applications and limiting network effects.

Evidence: The rapid adoption of account abstraction (ERC-4337) and smart accounts demonstrates user preference for unified, portable identity over managing dozens of isolated private keys.