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This article is a part of IOV Labs’ series focused on helping newcomers to the world of Web3 understand the value of decentralized finance. Read on to explore how self sovereign identity simplifies user onboarding to Web3 projects, enables interoperable credentials, and helps in banking the underbanked communities.

Data breaches impact ±400 million people each year as a consequence of attacks on centralized identity management authorities and intermediaries. Several decentralized applications have emerged recently to ensure better data protection and bring back data ownership to users.

However, one thing decentralized applications have rarely been able to offer is user-friendliness and accessibility. This is what has traditionally set them behind more traditional financial services, even though DeFi is a better alternative for millions of individuals, particularly the unbanked.

Self Sovereign Identity (SSI) has recently emerged as a new paradigm for managing and securing personal identity that could go some way towards rectifying this. In this article, we explore the concept of SSI and its potential to create better UX for Web3 users.

What is Self Sovereign Identity?

In today’s increasingly digital age, personal identity has become a crucial factor in accessing various services, from financial transactions to healthcare services. However, traditional methods of identity verification, such as usernames and passwords, have proven susceptible to hacking, phishing, and other forms of fraud.

Self Sovereign Identity (SSI) is a new concept that has emerged in recent years, driven by the need for better and more secure ways of managing digital identity. It is a decentralized, user-centric approach to identity management that puts individuals in control of their own personal information, allowing them to manage their online identities securely and privately without the need for centralized authorities or intermediaries.

The basic idea behind SSI is that individuals should have complete control over their own personal information, including their identity and other sensitive data. This means that they should be able to decide what information they share, with whom, and under what circumstances.

In traditional identity systems, individuals are typically required to provide personal information to centralized authorities, such as governments or corporations, to obtain some form of identity credential, such as a passport or driver’s license.

In contrast, SSI systems allow individuals to create and manage their own digital identities, which are based on decentralized identifiers (DIDs) and verifiable credentials. DIDs are unique identifiers created by individuals themselves and verified by credible authorities or projects, rather than by centralized authorities, and they allow individuals to control their own identity information.

For example, imagine presenting a bouncer with your ID at a bar. You’re not just giving him proof that you’re over 18 but your name, address, and birthday. This is the real-world equivalent of centralized identity systems. SSI uses a decentralized identity system built on top of blockchain technology, which means the bouncer (so to speak) can see and verify proof of your age via a DID but isn’t privy to any other personal information.

Verifiable credentials are digital representations of identity information that are signed and issued by trusted entities, such as government agencies or financial institutions, and can be easily shared and verified across different systems and platforms. This, in turn, can lead to a more accessible and user-friendly UX.

How can SSIs Improve User Experience on Web3 Applications?

There are many potential UX benefits of Self Sovereign Identity, both for individuals and for organizations. Some of these benefits include:


Bad onboarding experiences lead to around one in four apps being abandoned by users after just one use. There are, of course, several reasons for this immediate abandonment, but good UX design and a more intuitive experience will more likely keep users engaged. SSI allows for a more streamlined experience that gets users from A to B with minimal effort.

Simplified User Flows

Self-sovereign identity allows individuals to always have their digital identity with them, regardless of where they go or which service they use. With traditional identity systems, each service provider has its own identity system, which means individuals must create multiple accounts and remember multiple passwords, for example, users have one account for Facebook, another for Google, and another for their bank account. With self-sovereign identity, individuals can have one digital identity that can be used across multiple services.

Interoperable Credentials

SSI systems are designed to be interoperable, meaning that they can be easily accepted by other systems and platforms. This allows individuals to use their digital identities across different domains and applications. This means those customers who are put off by new applications if they can’t login natively with their Facebook or Google accounts should be comfortably placated.

Banking the Unbanked

DeFi applications can be accessed by anyone with an internet connection and a smartphone, making it far more accessible to people who don’t have access to traditional banking services. DeFi transactions also typically have lower fees than traditional banking transactions and don’t require any credit checks, making it easier for the unbanked to access financial services.

Data Safety and Ownership

Identity theft and data breaches are of paramount concern to users, with 4% of people falling victim to ID theft in the last three years. Self-sovereign identity is built on blockchain technology, which provides a tamper-proof and secure way to store and manage identity information. In traditional identity systems, if a hacker gains access to a centralized database, they can steal the personal information of millions of individuals. With self-sovereign identity, everyone’s information is stored on their device or in a secure digital wallet, reducing the risk of data breaches. Individuals also own and control their identity information, which means they can decide what information to share and who to share it with, dramatically reducing the risk of identity theft.

What is RIF Name Service (RNS)?

The RIF Name Service (RNS) is a decentralized identity management system that allows you to integrate SSI protocols into your products to give your users all the UX benefits of SSI with minimal fuss. RNS is built upon the same foundations as Bitcoin at the cutting edge of Web3 finance and allows users to enjoy all the benefits of Web3 without losing the familiar UX of Web2.

To learn more, check out the RIF Product Suite today and discover our ever-growing toolkit of protocols engineered to help you build fast and scalable products on the blockchain.

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