The online transition has meant the virtualization of the physical—freed from the constraints of geography, distance, sight—our actions and impulses become digital through keyboards and cameras and microphones; input thoughts become signals speeding through cables.

This process strips away the context of our being—the obvious physical facts of our appearance, age, and history that make us who we are. This transformation is double-edged, both the root source of joyous online anonymity and a persistent thorn in the key vital of identity. Online interaction is novel, but identity is needed all the same to keep track, to keep score, to allow reliable reputable commerce, organizational structure, and social interactions.

Web1 was relatively identity-less, at least compared with the tidal wave of KYC, identification software, and document digitalization that arrived with Web2. The transition to Web3—with its expectation of improved data privacy, data custody, default encryption, and a “sufficient” level of decentralization—further removes us from legacy methods of tracking identification.

Here it is useful to winnow the broader discussion of identity down to “digital identity”, the identity created and used once a user is already online (and onboarded to whatever network).  Email, social media profiles, bank accounts. Things you log into and assume to carry out your online behaviors. Web3 has shifted the frontier from the creation and securing of these to the iteration and improvement of digital identity itself.

There are several serious goals here.  Freeing digital identity from the walled gardens and network effects of centralized services creates persistence and weakens monopolistic hegemonies, empowering the portability and ownership of data. Owning a persistent digital identity and the associated data history allows users to capture value created by the participation and contribution in platforms. This dynamic will destroy the popular “free” social paradigms that rely on externalized, shadowy backrooms auctioning off user data.

That’s how the theory goes, at least. The vision is grand, and still at the start.  Auspiciously, the architecture of blockchain design has brought with it a new type of digital identity, the native account of web3—the wallet.

Previous iterations of web advancement began with messaging, and later expanded to financial uses and smart functionality. Conversely, Bitcoin was in large part a reaction to the behind-closed-doors mismanagement of markets that led to the 2008 financial crisis. The priority was always on money, payments, and the transparency of those things.

Put simply, web3 went money first, and now it’s looping back to messaging and social functionalities. The same wallets designed for non-custodial & trustless commercial interaction retain these qualities for other purposes, specifically as the identity primitive of web3.

Blockchain architecture makes wallets persistent and universal. Wallets can connect with other wallets without any platform requirements, unconstrained by walled gardens or sunken-cost network effects of past behavior, buy-in, and data accumulation. Wallets can go anywhere with their data, which means interactions can’t be artificially limited. The data doesn’t stay on any one platform, the data is the commons of web3.

Equipping wallets with communication functionality means they are closer than ever to being a robust solution towards web3’s identity needs. Building reputation and permission systems on top of wallet architecture (while leveraging wallet activity, holdings, etc) could plug a major hole in Web3, sharply increasing usability and proliferating use-cases.

Relay is working on all these things. Wallet chat built on top of XMTP, profiles that aggregate wallet history and social graphs—Lens, Gitcoin Passport, Disco, to name a few—plus the token-gating and message-filtering needed to ironclad the web3 experience from spam and abuse.

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