Federated Identity

The Identity Provider (IdP) is the authoritative entity that creates, maintains, and manages user identity information and provides authentication services to relying parties. It is the central source of trust in a federation.

• Examples: Google, Microsoft Entra ID, Okta, or a corporate SSO system.
• Function: Authenticates the user, generates security tokens (like SAML assertions or JWTs), and securely transmits them to the service provider.
• Key Role: Decouples authentication from application logic, allowing services to outsource credential management.

The Relying Party (RP) or Service Provider (SP) is the application or service that relies on the Identity Provider to authenticate a user. It trusts the assertions made by the IdP.

• Function: Receives and validates the security token from the IdP. Upon successful validation, it grants the user access based on the claims within the token.
• Benefit: Eliminates the need to manage user passwords locally, reducing security risk and administrative overhead.
• Example: A SaaS application like Salesforce or GitHub that allows login via "Sign in with Google."

A trust framework is the formal set of technical standards, policies, and legal agreements that govern the federation. It establishes the rules of engagement between Identity Providers and Relying Parties.

• Components: Includes technical protocols (SAML, OAuth 2.0, OIDC), security requirements, liability models, and data sharing policies.
• Purpose: Ensures all parties have a common understanding of security levels, privacy practices, and operational procedures.
• Example: The Kantara Initiative or the InCommon Federation in higher education.

Security tokens (or assertions) are digitally signed packages of information that convey authentication and authorization data from the IdP to the RP. They are the currency of trust in a federation.

• Common Formats: SAML Assertions (XML-based) and JSON Web Tokens (JWT) used in OAuth 2.0 and OpenID Connect.
• Contents: Contain claims about the user (e.g., username, email, group membership) and metadata about the authentication event.
• Security: Signed by the IdP's private key to prevent tampering and often encrypted for confidentiality.

Single Sign-On (SSO) is the primary user experience benefit of federated identity. A user authenticates once with the Identity Provider and gains seamless access to all connected Relying Parties without re-entering credentials.

• Mechanism: After initial login, the IdP session is maintained. When the user accesses a new service, the IdP provides a token automatically if the session is valid.
• Impact: Drastically improves user convenience, reduces password fatigue, and centralizes session management and logout procedures.

This feature controls the selective sharing of user attributes (data claims) from the IdP to the RP, often requiring explicit user consent.

• Process: The RP requests specific user attributes (e.g., email, profile picture). The IdP prompts the user to approve this data release, adhering to privacy principles.
• Protocol Support: Central to OpenID Connect (OIDC), which standardizes scope-based attribute requests (e.g., profile, email).
• Importance: Enables minimal disclosure, giving users control over their personal information shared across services.

A federated identity system relies on a network of trusted third-party providers that authenticate users and issue verifiable credentials. Instead of each service managing its own login database, they trust assertions from these IdPs. Key components include:

• Identity Provider (IdP): The service that authenticates the user (e.g., Google, a government portal, a decentralized identifier).
• Relying Party (RP): The application or service that accepts the IdP's authentication.
• Trust Framework: The legal and technical agreements that define how IdPs and RPs interact and share data.

Web3 transforms traditional federation into user-centric identity. Instead of corporate IdPs holding your data, you control your credentials via Decentralized Identifiers (DIDs) and Verifiable Credentials (VCs) stored in a personal wallet. The blockchain acts as a neutral, public verifiable data registry for checking credential status and DID public keys, without storing personal data. This shifts the trust model from institutions to cryptographic proofs and open standards.

Interoperability in federated identity, both traditional and Web3, is driven by open standards.

• OAuth 2.0 & OpenID Connect (OIDC): The dominant protocols for traditional web federation, allowing secure authorization and authentication.
• W3C Verifiable Credentials: A data model for cryptographically secure, privacy-preserving digital credentials.
• Decentralized Identifiers (DIDs): A W3C standard for identifiers controlled by the user, independent of any central registry.
• SIOP (Self-Issued OpenID Provider): A profile of OIDC that enables a DID holder to act as their own IdP.

Federated identity bridges the gap between Web2 convenience and Web3 ownership.

• Login with Ethereum (SIWE): Uses a cryptographic signature from an Ethereum wallet (like MetaMask) to authenticate, acting as a user-controlled IdP.
• European Digital Identity Wallet (EUDIW): A government-led initiative to provide citizens with a sovereign digital ID for accessing public and private services across the EU.
• Microsoft Entra Verified ID: An enterprise service for issuing and verifying employment, education, and other credentials as W3C Verifiable Credentials.
• Civic Pass: A decentralized identity protocol providing reusable KYC credentials for accessing DeFi and other permissioned Web3 services.

The federated model, especially when decentralized, offers significant improvements:

• User Experience: Eliminates password fatigue with single sign-on (SSO) across services.
• Reduced Liability: Relying parties don't store sensitive password databases, minimizing breach risks.
• Portability & Interoperability: Credentials can be used across different platforms and ecosystems.
• User Control & Privacy: Web3 SSI enables selective disclosure, where users share only the specific data needed (e.g., proving they are over 21 without revealing their birthdate).
• Auditability: Blockchain-based registries provide transparent, tamper-proof logs of credential issuance and revocation.

Adopting federated identity, particularly in Web3, involves navigating several hurdles:

• Trust Establishment: Defining and agreeing on which IdPs or issuers are trustworthy is complex.
• Key Management: Users bear the responsibility of securing their private keys; loss means loss of identity.
• Interoperability Fragmentation: Multiple, competing standards and blockchain networks can create silos.
• Regulatory Compliance: Meeting KYC/AML regulations with privacy-preserving credentials is an ongoing challenge.
• Revocation & Freshness: Efficiently revoking compromised credentials without centralized lists remains a technical focus area.

Federated identity dramatically lowers onboarding and authentication barriers. Users can access new services with a familiar login (e.g., "Sign in with Google"), bypassing lengthy registration forms. This is critical in decentralized applications (dApps) where a blockchain wallet (like MetaMask) acts as the IdP, enabling one-click access to hundreds of services using the same cryptographic key pair.

• Accelerates user acquisition by removing signup friction.
• Enables seamless cross-application workflows without re-authentication.

Security is consolidated at the Identity Provider, which can enforce robust policies like multi-factor authentication (MFA), anomaly detection, and immediate credential revocation. This is superior to fragmented security across multiple services with varying standards. Sensitive credentials are not stored or transmitted to each service provider, reducing the attack surface for credential stuffing and phishing.

• Centralized audit trails for all access events.
• Instant access revocation across all federated services by disabling the IdP account.

Modern federated identity protocols (e.g., OAuth 2.0, OpenID Connect) support selective disclosure. The Identity Provider can release only specific, consented claims (attributes) about the user to the Service Provider, adhering to the principle of data minimization. For example, a dApp might only request a wallet address and a proof of uniqueness, not the user's full name or email.

• User-centric control over what personal data is shared.
• Reduces data sprawl and compliance burden for Service Providers.

For enterprises, federated identity automates Identity and Access Management (IAM). User lifecycle events (joiner, mover, leaver) are managed once at the source IdP (e.g., an HR system), which propagates changes automatically to all connected Service Providers via SCIM or similar protocols. This eliminates manual account provisioning/deprovisioning, reducing IT costs and the risk of orphaned accounts.

• Automates compliance for access reviews and audits.
• Scales efficiently with the number of integrated applications.

The central entity that authenticates a user and issues security tokens (like SAML assertions or OIDC ID Tokens). The IdP acts as the single source of truth for identity, allowing service providers (SPs) to trust its authentication verdict without managing passwords directly. This decouples authentication from authorization.

• Examples: Okta, Microsoft Entra ID, Google, social logins (Sign in with Google).
• Protocols: SAML 2.0, OpenID Connect (OIDC), OAuth 2.0 (for delegated authorization).

Federation relies on pre-established trust relationships between the IdP and Service Providers. This is formalized through metadata exchange, certificate sharing, and contractual federation agreements.

• Metadata: Contains endpoints, public keys, and supported protocols.
• Circle of Trust: A group of entities that have agreed to trust each other's authentication.
• Risk: A compromised or malicious IdP becomes a single point of failure for all connected services.

Upon successful authentication, the IdP issues a cryptographically signed assertion token containing claims about the user (e.g., email, groups). The SP validates the token's signature and issuer to grant access.

• Integrity & Non-Repudiation: Digital signatures prevent tampering and prove the IdP issued the token.
• Standardized Claims: Ensure interoperability between different systems.
• Token Lifetime: Short-lived tokens (JWTs) limit the impact of token theft.

Blockchain introduces decentralized identifiers (DIDs) and verifiable credentials (VCs), shifting from centralized IdPs to user-centric, cryptographic identity wallets.

• Traditional: Centralized IdP (e.g., Google) is the authoritative issuer and verifier.
• Decentralized: User holds credentials in a wallet (e.g., Polygon ID, SpruceID). Any entity can cryptographically verify credentials without contacting the original issuer, reducing reliance on a central authority.

While streamlining access, federated identity introduces specific threat vectors that must be managed.

• IdP Compromise: A breach gives attackers access to all federated services (supply chain attack).
• Token Interception & Replay: Stealing SAML or OIDC tokens during transmission.
• Misconfiguration: Incorrect SP or IdP settings can lead to authentication bypass.
• Privacy Leakage: The IdP can track user activity across all connected SPs.

Organizations implement controls to secure federated identity deployments.

• Strict Certificate Management: Regularly rotate signing certificates and validate SP metadata.
• Implement Strong Authentication: Enforce MFA at the IdP level.
• Use Short Token Lifetimes & Strict Validation: Validate audience (aud), issuer (iss), and expiration.
• Privacy Preservation: Use pairwise identifiers and minimize claims to adhere to data minimization principles.

A Decentralized Identifier (DID) is a new type of globally unique identifier that does not require a centralized registration authority. It is a foundational component of Self-Sovereign Identity (SSI). DIDs are typically stored on a distributed ledger (like a blockchain) and are controlled by the identity holder via cryptographic keys, enabling verifiable, decentralized digital identity.

• Core Function: Provides a persistent, cryptographically verifiable identifier.
• Standard: Defined by the W3C DID specification.
• Example: did:ethr:0x1234...

A Verifiable Credential (VC) is a tamper-evident digital credential whose authorship and integrity can be cryptographically verified. It is the digital equivalent of physical credentials like a driver's license or university degree. In a federated identity model, VCs are issued by one entity (the issuer) and can be presented by the holder to other entities (verifiers) without needing to contact the original issuer directly.

• Structure: Contains claims about a subject, metadata, and a digital proof.
• Standard: Defined by the W3C Verifiable Credentials Data Model.

Self-Sovereign Identity (SSI) is a model for digital identity where individuals or organizations have sole ownership and control over their identity data without relying on a central authority. It is the philosophical and user-centric framework that technologies like DIDs and VCs enable. SSI principles emphasize user consent, minimal disclosure, and portability, making it a natural evolution of federated identity systems.

• Key Principle: User-centric control and data portability.
• Contrast: Differs from traditional federated identity by removing centralized identity providers as mandatory intermediaries.

An Identity Provider (IdP) is a trusted service that creates, maintains, and manages identity information and provides authentication services to other applications (known as Relying Parties or Service Providers). In classic federation models (like SAML or OIDC), the IdP is a central component (e.g., Google, Okta, Azure AD). The user authenticates with the IdP, which then asserts their identity to connected services.

• Role: The authoritative source for authentication in a federation circle.
• Protocols: Commonly uses SAML 2.0, OpenID Connect (OIDC), or WS-Federation.

A Relying Party (RP) or Service Provider (SP) is an application or service that relies on an external Identity Provider (IdP) to authenticate a user. After successful authentication by the IdP, the RP trusts the identity assertion (like a SAML assertion or OIDC ID Token) and grants the user access. This separation of authentication (IdP) and authorization/application logic (RP) is the core of federated identity.

• Function: Consumes authentication assertions to grant access.
• Example: A SaaS application that allows "Sign in with Google."

A Zero-Knowledge Proof (ZKP) is a cryptographic method by which one party (the prover) can prove to another party (the verifier) that a statement is true, without revealing any information beyond the validity of the statement itself. In identity systems, ZKPs enable selective disclosure and enhanced privacy. A user can prove they are over 21 from a credential without revealing their exact birthdate, or prove membership without revealing their identity.

• Benefit: Enables privacy-preserving verification, a key goal for modern federated and SSI systems.
• Use Case: zk-SNARKs and zk-STARKs are ZKP constructions used in blockchain-based identity.