NFTS RESEARCH DIGITAL IDENTITY
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Executive Summary
While NFTs are commonly associated with art and collectibles, their true potential extends into the realm of digital identity. This research focuses on how standards such as ERC-725 (Key-Value Identity) and ERC-735 (Claim Registry) enable NFTs to function as self-sovereign identity objects, with use-cases beyond ownership — toward verification, access control, and reputation.
Background
The current Web2 identity systems rely on centralized accounts, opaque data, and external KYC processes. NFTs — especially Soulbound NFTs (non-transferable) — can represent verified, on-chain identity proofs or behavioral records, attached to an individual’s wallet in a verifiable way.
Standards such as ERC-725 and ERC-735 provide a programmable structure for identity and claims.
Key Concepts
ERC-725
Standard for key-value storage of identity attributes on-chain (name, email, role, etc.)
ERC-735
Mechanism to store and manage third-party claims about an identity (e.g., “KYC verified by X”)
NFT Identity Object
A non-transferable NFT that carries metadata linked to identity
Soulbound NFT
Non-transferable NFT bound to one wallet, ideal for identity or certificates
Use-Cases in Web3 Ecosystems
Verifiable Web3 Resume → NFTs hold learning badges, skill endorsements, contributor history
Access Rights → Smart contract gates based on roles stored in ERC-725 NFT
Decentralized KYC → ERC-735 claims issued by third parties (auditors, DAOs, institutions)
Community Membership → Identity NFTs grant access to Discords, voting, or gated content
Interoperability & Privacy Notes
ERC-725 profiles are public by design → must limit sensitive fields
Encryption layer (e.g., Lit Protocol) can add selective disclosure
Multiple identities per user wallet can be deployed via NFT issuance from separate contracts
Opportunities & Risks
Modular identity system interoperable across DAOs & DApps
Sensitive data exposure if poorly designed
Identity verification without central authority
Risk of false claims or sybil attacks
Reputation building in open ecosystems
Reputation can be gamed or sold
Conclusion
ERC-725 and ERC-735 open new possibilities for NFTs to move beyond collectibles — toward verifiable, self-owned identity systems. By using NFTs as programmable identity objects, the Web3 ecosystem can build trust without compromising sovereignty.
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