A Plural Decentralized Identity Frontier: Abstraction v. Composability Tradeoffs in Web3

Abstract: In this article, we explore the tension between abstraction and composability in web3 today, specifically within identity solutions, and argue that the current standard DID v1.0 is sufficiently under specified, allowing for many methods and instantiations, including blockchain based certificates. We view experiments today in web3 identity as additive and complementary, and argue that often cited differences are of degree and more in form, less in substance. By way of illustration, we compare decentralized naming services and blockchain based identity certificates such as soulbound tokens (SBTs) to decentralized identifiers (DIDs) and verifiable credentials (VCs). Both paradigms, to the extent they can be meaningfully differentiated, share similar potential as well as challenges. Specifically, we refer to fears about non consensual verification (scarlet letters) and show DID method iterations are not immune by issuing an innocuous public scarlet letter to a DIDs associated public address for anyone to see. Moreover, we argue that because SBTs are unspecified, one could characterize SBTs as an iteration, or extension, of VCs that additionally aspire to achieve composability with web3 smart contracts for correct execution of code, privacy, coercion resistance, and censorship resistance. We offer research paths for how VCs can also achieve these properties. We do not comment on cost, scalability, transferability, or common knowledge as they have been previously reviewed.