The current state of digital identity management in Web3 presents challenges due to its fragmented nature. This fragmentation leads to operational inefficiencies and limits the potential for individual users and businesses. To address these issues, developers are working towards developing an open and user-focused infrastructure.

At Consensus Hong Kong, BeInCrypto spoke with Moca Network’s project lead Kenneth Shek, about scaling a digital identity-based ecosystem to create a unified environment that empowers users to manage their data.

The Fragmentation Challenge

In Web2 and Web3, user digital identities are scattered across various platforms, leading to inefficiencies and lost opportunities for users and businesses. While businesses struggle to identify and target valuable users accurately, users are not fully recognized for their accumulated value across different platforms.

“Using a Web2 sense, you have a Marriott account, a British Airways account, you have all these accounts. Even if you’re using the same email login, you are treated as a different user and you need to have a password manager remembering 100 logins, and there’s nothing that you can reuse from one app to another app,” Shek explained. 

Similarly, when it comes to advertising in Web2, companies use platforms like Meta to categorize users and deliver tailored advertisements, according to a report by South Korean Web3 firm Tiger Research. However, this process is constrained by the limited user data available within each platform. 

Consequently, the precision and effectiveness of these targeted ads diminish. Users, who typically engage with numerous online services, experience fragmented digital profiles, resulting in advertisements confined to the context of single platforms. 

Web3 projects experience similar issues in the deployment of airdrops.

Web3’s Identity Verification Problem

Web3 projects often employ airdrops to distribute rewards to active ecosystem participants. However, implementing these airdrops is complicated by the dispersion of user activities across both Web2 and Web3 platforms.

“There’s no one single layer that connects everything,” Shek told BeInCrypto.

The reliance on data derived from a single blockchain can hinder the accurate identification of legitimate contributors. Furthermore, the inherent anonymity and decentralized structure of Web3 enable users to enter and exit networks with relative ease. 

A notable illustration of these difficulties is the Starknet airdrop, which targeted approximately 1.3 million wallet addresses. The airdrop encountered difficulties distinguishing authentic contributors due to limitations in available data. This resulted in a significant decline in network activity.

Platform-Centric Control Issues

Tiger Research attributes digital identity fragmentation to several factors. These include platform-centric control, technical incompatibilities between platforms, and data restrictions imposed by large technology companies like Alibaba, Tencent, and the FAANG group.

This systemic issue also generates practical inconveniences and introduces imbalances in value distribution. Users must establish distinct accounts on each platform and repeatedly reconstruct their activity and profile data. 

Platforms leverage this situation to accumulate and retain the value of user data. Companies like Google and Meta generate substantial annual revenue through advertising models that depend on user data. Additionally, platforms such as Reddit generate significant quarterly revenue by commercializing user data. 

Conversely, the users, as the originators of this data, are typically excluded from direct participation in the resulting economic benefits.

“The ownership should be going back to the user. There’s already many court cases where companies, including banks or Google, are suing the users for taking their data and monetizing on their own, and every time the case and the conclusion is that the user has a right to own their own data and monetize it,” said Shek. 

Moca Network, Animoca Brands’ flagship project, is developing a digital identity ecosystem. This project aims to unify user data and empower users to manage their own information.

The Case for an Open Internet

Though Moca Network is generally defined as an NFT-focused project, its dedication to creating an open internet infrastructure has been in full force for a long time. 

“Since three years ago, we have been talking about how to grow the network effect and the value by pulling everything together. Imagine the entire Animoca portfolio, all the partners we work with, the enterprises with large user bases are going to adopt this. Everything will flow to one another and with crypto as the incentive layer, it’s going to be thriving beyond the big tech companies,” Shek told BeInCrypto. 

The network’s Moca 3.0 project proposes a system where a single, unified account manages a user’s digital assets, identity information, and reputation across various online platforms. 

The design prioritizes a user-centered approach. Systems are built to accommodate individual users rather than forcing them to adapt to existing limitations. Moca 3.0’s AIR Kit would serve as the network’s universal account system. 

“The AIR Kit stands for Account, Identity, and Reputation, and it’s the SDK that our partners would be integrating, building that network together,” Shek explained.

AIR Kit integrates accounts and identities, using an ID as the user-service interface. The system simplifies Web3 wallet creation and on-chain activity by abstracting blockchain complexities. It also enhances user experience through features such as gas coverage and cross-chain transactions.

Meanwhile, Moca has also integrated a structure that ensures users control their data.

Empowering Users with Data Ownership

The Moca Network’s credential system, complementing its unified account system, facilitates user data management and value creation. Users gain data control via secure, decentralized storage and manage access for credential handling, addressing centralized platform limits.

“What we want to bring is ownership and interoperability of user digital identity and their own data that they can tokenize and they can bring it anywhere so as to make the whole internet programmable. Right now it’s not programmable because every time you go to a new game or you go to a new app, you’re being treated as a new user every time. But what if you do something in one app and then there’s a history about you and then you go to another app, that app is creating a programmable user experience based on your user identity,” Shek said.

Meanwhile, data protection within the system employs tamper-proof technology and zero-knowledge proofs. Cross-chain messaging protocols enable users to transfer credentials between systems, facilitating secure interaction with smart contracts across various blockchains.

Future development plans include integrating technology that verifies and utilizes Web2 data on-chain. The integration of Web2 and Web3 data aims to create a more comprehensive digital identity system designed to bridge the gap between these environments and foster a user-centric ecosystem.

“2025 is definitely going to be very exciting. We’re building an infrastructure that we haven’t seen in the space right now. We are focused on the things that matter and that would actually make an impact on adoption,” Shek concluded.