How Litentry Captures Value with its Identity Model?

5 min readFeb 29, 2024

Introduction

The Litentry Identity model hinges on IdentityHub — the primary interface for both the protocol and front-end product within the Litentry ecosystem. Positioned as a decentralized Web3 personal data management tool, its core purpose is to empower users by facilitating the aggregation and management of their data across various blockchains. It also enables seamless data access for third-party decentralized applications (dApps), allowing users to maximize the value of their identity without compromising privacy and anonymity. IdentityHub uses verifiable credentials which play a significant role in enabling individuals to assert and manage their identity in a self-sovereign manner. It also helps to address the problems of data tracing and ensure proper value allocation within the Litentry ecosystem.

Understanding the Dynamics of the Identity Score System

Data sovereignty allowed a new dynamic among identity owners by allowing them to independently provide their personal data to service providers of choice in exchange for economic and social value. IdentityHub leverages the identity data economy to capture value by allowing personal data to be accumulated and converted into an identity score or even personal reputation. The identity score can be used by projects that need to promote products or achieve community growth, using exclusive services or monetary rewards as an exchange. In this case, the identity data economy bears certain similarities to the creator economy.

While content creators produce content to gain followers and generate exposure value that projects can capture, Web3 users on IdentityHub generate and accumulate scores through participation in various activities such as on-chain behaviors, transactions, asset holdings, etc. However, unlike the creator economy, users do not need to actively pursue attention and exposure.

How Litentry Captures Value

The Litentry IdentityHub focuses on facilitating the identity economy between projects and Web3 users. It aims to allow identity data to be more widely and privately consolidated into on-chain reputation which can then be discovered and utilized by projects. On one hand, robust privacy solutions enable Web3 users to overcome concerns about privacy breaches and freely construct and use their on-chain identities. On the other hand, allowing users to connect identities from different networks enhances data liquidity and facilitates systematic identity data management and analysis.

Litentry does not provide functionalities that incorporate off-chain data onto the blockchain, enabling users to modularize data through verifiable credentials. This helps in calculating corresponding identity scores and facilitates the flow of reputation between user identity and project owners.

More than just our Identity.

In the context of the identity economy, the value individuals can contribute extends beyond their basic identity attributes. It encompasses various aspects that evolve as the economic model evolves. This value can manifest in different ways, including but not limited to:

Being a perfect fit for a Web3 project’s service.
Possessing valuable skills, expertise, or experience that can be tapped into.
Being as valuable as the financial resources they can bring to the project.

The features of different projects would determine the user demographics they aim to attract and can attract. To cater more accurately to project owners’ requirements, Litentry introduces the functionality of project-specific identity scores, enabling project owners to precisely target user groups that align with their project’s tone and values.

The identity framework

To be able to effectively capture the interest of web3 projects and value for users, Litentry introduces a framework aimed at facilitating the privacy-preserving flow and computation of identity data and on-chain score. This identity framework comprises the following essential components:

Cross-chain Identity Aggregation: Enable the creation of identity graphs that establish linkages between various crypto wallets and web2 accounts. By consolidating identity data from multiple blockchain networks, this feature facilitates unified management, resulting in improved data availability, data flow, and operational efficiency.
Trusted Execution Environment Computation: Leverages TEE technology to enhance user privacy during identity data computation and the generation of verifiable credentials
Verifiable Credentials: By partitioning personal data within a verifiable credential container, users can make self-attestations without exposing their wallet address or other identity information. This method ensures minimal data sharing while prioritizing privacy and practicality.
Data Value Exchange: The time and effort that individuals invest in generating data and accumulating scores need to have value attributed to them. With this, individuals will be fairly compensated for the data they produce. Enabling users to reap economic benefits from their data contributions, increases their willingness to share data.

The identity economy requires the accumulation of privacy-preserving reputation and efficient identity management. Litentry presents an identity framework that addresses these challenges for project owners and users. By enhancing data availability and operational efficiency, Litentry empowers users with greater control over their identities while fostering trust and cooperation between users and service providers in the decentralized ecosystem.

Looking Ahead

Finally, the Litentry Identity model stands at the forefront of revolutionizing the way individuals interact with their Web3 identity data. By focusing on privacy, interoperability, and value capture, Litentry’s IdentityHub serves as a pivotal interface for users and projects alike, facilitating a symbiotic relationship where data sovereignty meets economic opportunity. Through its innovative approach to identity management, Litentry empowers users to take control of their personal data while providing avenues for them to extract tangible value from their digital footprint. The emphasis on verifiable credentials, trusted execution environments, and cross-chain identity aggregation ensures that privacy remains paramount, addressing longstanding concerns surrounding data security and ownership in decentralized ecosystems.

Furthermore, the introduction of project-specific identity scores adds granularity to the value exchange process, enabling project owners to target users effectively while fostering a more personalized user experience. This not only enhances user engagement but also incentivizes data contribution, creating a virtuous cycle of value creation within the Litentry ecosystem.

Conclusion

With the continued evolution of the identity economy, Litentry promises to unlock new avenues for innovation and collaboration in the Web3 space. As the framework matures and adoption grows, we expect to see further integration with decentralized applications, expanded use cases for identity data, and a more equitable distribution of value across participants. In essence, Litentry’s approach to capturing value through its identity model not only addresses the inherent challenges of identity management in decentralized environments but also lays the groundwork for a more inclusive and sustainable digital economy where individuals are empowered to leverage their data for meaningful gain, all while safeguarding their privacy and autonomy.

About Litentry

Litentry is a privacy-preserving identity aggregation protocol that enables granular access to and control of data. Featuring a DID indexing protocol and a Substrate-built distributed DID validation blockchain, Litentry provides a decentralized, interoperable identity aggregation service that mitigates the difficulty of resolving agnostic DID mechanisms. Litentry provides a secure vehicle through which users manage their identities and dApps obtain real-time DID data of an identity owner across different blockchains.

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