This article elaborates on the decentralized society (DeSoc) centered around the "sovereign individual" from three systemic layers: identity, economy, and governance.
Written by: LXDAO
This article serves as the final chapter of the "Trilogy of Blockchain Civilization," aiming to outline the prototype of a decentralized society (DeSoc). We believe that civilization is undergoing a matrix migration: transitioning from the atomic age to the digital age. In this context, Ethereum demonstrates the potential to become the foundational framework of civilization—a "correctable system" that allows social institutions to continuously iterate in a low-cost, programmable environment.
The upper limit of this framework begins with its most basic unit—humans. This article argues that as Real World Assets (RWA) are gradually brought on-chain, the overall mapping of cultural thoughts and Real World Organizations (RWO) will be predicated on the "on-chain identity" of individuals. Rights such as personal identity, credit, abilities, and social relationships must be reliably mapped, freely transferred, and combined to achieve the on-chain reconstruction of social structures.
Accordingly, this article discusses the DeSoc centered around the "sovereign individual" from the three systemic layers of identity, economy, and governance: individuals can migrate at low costs between multiple DAOs (Decentralized Autonomous Organizations) using their tokenized on-chain rights and assets, thereby driving governance optimization and ultimately forming a competitive governance landscape, opening a new chapter in the digital age.
Keywords: Decentralized Society; Sovereign Individual; On-chain Identity; Data Assetization; Universal Basic Income; Digital Age.
Introduction: Eternal Migration—The Path to Freedom from Geographic Frontiers to Digital Realms
The freedom to migrate is one of humanity's oldest and most fundamental rights. Before the formation of nation-states and fixed borders, tribes and families could migrate based on survival and security needs, choosing better environments. This mechanism of feedback through migration serves as a primitive constraint on power—it does not eliminate power but ensures that it is always replaceable.
Agricultural civilization and state construction tightened this freedom: population and land became bound, and power anchored individuals to their birthplace through "irrevocable authorization," transforming social contracts from dynamic reciprocal relationships into static constraints. The cost of individual migration became high, and reclaiming power became difficult.
However, the pursuit of individual freedom has never disappeared, giving rise to two major trends:
Vertical Escape: Individuals immigrate in search of freer, more prosperous rule-of-law societies, achieving proactive choices regarding governance and services.
Horizontal Union: Nation-states merge to obtain higher-level public goods, broadening the boundaries of mobility and markets.
These two trends point to a core demand: people are always seeking a field where they can achieve "voting with their feet" at lower costs and higher efficiency.
Today, blockchain technology, particularly DeSoc on Ethereum, is opening a third path: constructing a brand new digital realm. Here, the right to "vote with one's feet" is inherently and cost-effectively re-empowered for every individual through technology.
This article aims to argue that DeSoc, based on the "on-chain identity" as a starting point, represents the latest chapter in humanity's eternal quest for freedom in the digital age. It will achieve the ultimate deconstruction of "irrevocable authorization" and accelerate civilization's evolution into the digital age.
Identity Layer—From "Data Exposure" to "Sovereignty in Individuals"
1. Theoretical Foundation: From SBT to the Vision of "Social Composability"
Vitalik Buterin, in works such as "Decentralized Society: Finding the Soul of Web3" and "What I Think About Biometric Identification," has laid the theoretical foundation for the next generation of identity systems. The concept of "Soul-Bound Identity" (SBT) he proposed is not another financial asset but an irreplaceable credential that carries an individual's social history, credit, and contributions. The ultimate goal of this system is to construct social composability—allowing each independent "person" to have a recognizable, trustworthy, and incentivized social foundation on-chain.
2. Technical Architecture: Sovereign Identity Stack and Standardization Process
The vision of "on-chain identity" is being translated from theory into engineering reality through a series of Ethereum community standards (EIP/ERC). Its technical core is a three-layer "sovereign identity stack" driven by community consensus:
2.1 DID: The Root of Sovereignty and Standardized Identity Anchor
Decentralized Identifiers (DIDs) that follow the W3C DID standard provide individuals with the ability to generate and fully control their "root identity." On Ethereum, this concept is materialized through EIP-4361 (Sign-In with Ethereum, SIWE). This standard allows users to log in to third-party applications directly using their Ethereum accounts, achieving decentralized identity verification and marking a key step in the return of identity sovereignty to individuals. Meanwhile, EIP-712 (Structured Data Signatures) provides security and user experience guarantees for DIDs when signing complex, readable off-chain statements (such as identity credentials).
2.2 Zero-Knowledge Proofs: Privacy Shield and Verifiable Credential Engine
Zero-Knowledge Proofs (ZK) serve as the privacy-enhancing layer within the identity stack, ensuring the authenticity of identity claims (e.g., "I am over 18") without exposing all data (e.g., birth date). Although ZK itself is a cryptographic primitive, its application in the identity domain is being propelled by exploratory proposals such as ERC-5833 (Privacy-Compliant Compositions of Soul-Bound Tokens), aimed at addressing compliance and privacy challenges for SBTs.
2.3 SBT: The Soul of Society and On-Chain Credential Container
As a data container for identity and a module for social history, the form of SBT is being defined and optimized through multiple ERC proposals. Its core idea originates from ERC-721 (Non-Fungible Token Standard), but the key feature of "non-transferability" is endowed by specialized extension standards: ERC-4973 and ERC-5192 (Minimal Soul-Bound Token) are two competing proposals aimed at defining the core logic of SBTs, both injecting the "non-transferable" attribute into the tokens and binding their metadata to identity. Additionally, ERC-1155 (Multi-Token Standard) is often considered for issuing and managing large quantities of composable SBT credentials due to its efficient batch processing capabilities, thereby constructing the programmable social DNA of individuals in the digital world.
This community-standard-based technical stack composed of DID (EIP-4361/712) + ZK (Privacy Enhancement) + SBT (ERC-4973/5192/1155) is the foundational, interoperable architecture that allows DeSoc to transition from white papers to smart contracts.
3. Ecological Practice: Early Mapping of On-Chain Personalities
Currently, the identity experiments within the Ethereum ecosystem exhibit characteristics of "fragmented exploration."
A series of cutting-edge projects are dedicated to mapping abstract identity theories into concrete digital personality networks:
Lens Protocol / Farcaster: Bringing social graphs on-chain, making social relationships and influence portable and verifiable assets.
Worldcoin: Despite controversies, its attempt to verify "human uniqueness" through biometric means reveals a path to resist Sybil attacks and achieve inclusive identity distribution.
Proof of Humanity / Idena: Through different "human proof" mechanisms, these projects aim to distinguish real individuals from fake identities on-chain, safeguarding the authenticity foundation of DeSoc.
Gitcoin Passport / ENS: By integrating on-chain contributions, domain name identities, and reputation credentials, these projects build quantifiable foundational profiles for individuals' social capital.
These practices resemble puzzle pieces; although breakthroughs have been achieved in social, identity, and biometric dimensions, they objectively form "multi-source reputation fragments" without realizing the "composable digital personality" required by DeSoc.
In this context, the explorations of projects like Credinet become particularly important. They no longer settle for isolated descriptions of a single attribute of "person," but integrate tools like MACI (a verifiable computing tool for resisting manipulation) to attempt to construct a digital identity framework that allows users to carry and prove their multidimensional credit fragments. This project aims to create a sustainable, verifiable, and composable "Lego-style" portrait of individual rights from multiple independent ZK proof modules, achieving the goal of "unified portrait + fragmented rights + privacy against coercion + decentralized governance."
4. Real-World Drivers: From Industry Pain Points to Civilizational Infrastructure
Building decentralized identity is not only a technological evolution but also a rigid demand for the realistic development of blockchain.
Industry Drivers: Advanced financial applications such as insurance, credit, and decentralized governance rely on trustworthy identities to achieve precise risk pricing and incentive distribution.
Civilizational Drivers: In the grand narrative of Ethereum civilization, DeSoc is not a simple extension of DeFi but a paradigm revolution in social structure. Establishing a trustworthy identity infrastructure is the foundation for constructing a new civilization.
Competitive Drivers: The next growth curve for the industry should not be trapped in the inward competition of DeFi but should shift towards building foundational facilities like identity layers that possess positive externalities and network effects, fully leveraging Ethereum's irreplaceable advantages of trusted neutrality.
Conclusion: When individuals' credit, abilities, and networks of relationships become portable, freely migratable digital assets, humanity regains a crucial freedom in the digital world—migration.
Thus, the construction of the identity layer is far more than a technological upgrade. It is the ultimate affirmation of personal rights and a historic starting point for Ethereum civilization's transition from "capital contracts" to "social contracts." From now on, individuals are no longer prisoners of algorithms but true sovereign nodes in the on-chain world.
The establishment of this identity layer allows "individuals" to become unique entities with complete histories and reputations in the digital world for the first time, providing a trustworthy atomic unit for all subsequent socio-economic activities.
Economic Layer: From "Financial Legos" to "Social Legos" Ecological Reconstruction
As trustworthy and rich digital identities become a reality, a market system based on credit will rise accordingly. Individuals can break free from the constraints of geographic boundaries, evolving from "digital nomads" to "digital citizens," living and creating within a new economy built on algorithmic trust.
3.1 Credit as Capital: The Rise of Personality Finance
When trustworthy identities become a universal reality, a financial market based on personality credit can be constructed.
Members of DAOs can issue "reputation bonds" (a debt instrument backed by future labor or contribution earnings) based on SBTs;
Open-source developers can obtain "trust loans" based on their contribution records;
High-reputation communities can even issue stablecoins backed by collective credit.
The barriers to finance are completely dismantled. Trust is dynamically defined by algorithms and real-time behaviors. Finance returns to its essence—a quantifiable expression of social trust. From now on, financial activities are no longer exclusive games of capital but a natural extension of personality credit.
3.2 Reputation as Productivity: The Birth of the Idea Market
When trustworthy identities carry rich individual histories, a brand new "idea market" can be unlocked. All creative units, interactions, and evaluations are crystallized into a producer's reputation asset portfolio. Knowledge can be securitized, influence can be invested in, and collaboration can be quantified. In this new market, those who are trusted become the most productive individuals. At this point, an "idea market" based on trust as the unit of settlement takes shape.
3.3 Identity as Institution: On-Chain Integration of the Real Economy
A trustworthy identity system provides an institutional bridge for the integration of the real economy and the on-chain economy.
Organizations such as enterprises and communities can map their legal structures to on-chain sovereign identities, allowing complex relationships such as equity, governance rights, and asset rights to be automatically executed through smart contracts.
DAO Transformation: Equity and voting rights represented by NFT/SBT.
Community Financialization: Governance rules and profit distribution encapsulated in code.
This achieves a paradigm shift from "legal trust" to "algorithmic trust," laying a credible foundation for bringing the real world on-chain.
3.4 Economic Paradigm Shift: Endogenous Trust and Order Reconstruction
When trustworthy individuals become the basic units of the economy, the operational paradigm of the entire economy shifts accordingly. Its core manifestation is: transaction costs approach zero, while the cost of wrongdoing approaches infinity.
Collapse of Transaction Costs: Trust Becomes an Endogenous Mechanism
On-chain identity and credit systems eliminate three core frictions: information asymmetry, lack of trust, and performance difficulties. Trust transforms from an expensive external cost to a cheap endogenous algorithmic attribute, allowing the economic system to leap from a high-friction society to a low-friction society.
Soaring Costs of Wrongdoing: Credit Becomes a Permanent Constraint
The non-transferability of SBT permanently binds individuals to their behavioral records. A single act of fraud can damage on-chain credit, resulting in the loss of all collaborative opportunities until repaired. Under rational calculation, maintaining credit becomes the only optimal strategy.
Arrival of Trust Civilization: From Rule of Law to Self-Governance
When transaction costs approach zero and the costs of wrongdoing approach infinity, the foundation of social order shifts from external enforcement to internal constraints. The rule of law evolves into "trust self-discipline," with regulation yielding to "reputation constraints." We move from a "contract society" to a "credit civilization."
3.5 The Rise of Digital Nomads
When "individuals" are established as trustworthy, rich digital entities, the "digital nomads" free from territorial constraints truly evolve into digital citizens. Their basic economic source (UBI) consists of two parts.
Data Asset Income
An active, trustworthy on-chain identity itself is a data asset that can sustainably generate income. Individuals can authorize the use of their data rights to AI training, market analysis, and other demand-side needs through data markets, thereby obtaining stable, passive data rights income while protecting their privacy (e.g., through zero-knowledge proofs).
Node Network Income
By providing basic resources to the network (such as PoS staking, storage/computing power for DePIN devices), individuals earn corresponding network maintenance income. This income, along with data asset income, forms the universal income foundation that ensures basic economic security in DeSoc.
Governance Layer: From "Full Power Agency" to "Bit Authorization"
The essence of power is the possession and control of the rights of others. Since the birth of political society, this power has stemmed from the relinquishment of individual rights.
In the era of royal power, the relinquishment of rights was one-time and irrevocable, even extending to the rights of future generations; in the constitutional era, the relinquishment of rights occurred based on electoral cycles.
The commonality of these two models is that the relinquishment of rights is long-term in time and holistic in scope.
When rights are wholly and permanently relinquished, individuals lose the fundamental leverage to check power. Thus, the freedom to migrate becomes the ultimate defensive mechanism against power.
When individual rights transform into decomposable, combinable, and migratable on-chain data, no longer locked by geographical boundaries, this defensive mechanism is permanently activated through technology. The millennia-old pattern of political power thus undergoes fundamental reconstruction: power is forced to shift from monopoly to competition, from coercion to service. RWO and RWE (Real World Anything) will be redefined and rapidly iterated under this new power paradigm.
4.1 DAO: Institutional Experiments as "Digital City-States"
Every DAO, whether its goal is to manage protocols, operate communities, or make investments, can be viewed as a micro "digital city-state." They possess:
Written Constitution: Governance rules and charters encapsulated in smart contracts;
Independent Treasury: Community treasury managed by code;
Citizen Community: A rights-bearing entity composed of token holders and contributors.
4.2 Refinement of Freedom: "Chain Migration" and Multidimensional Identity Configuration
In the physical world, immigration means a one-time, bundled switch of political affiliation, economic environment, and cultural life, with high costs and a difficult process.
In DeSoc, "chain migration" achieves the unbundling and refinement of freedom. Individuals can enjoy high reputation in technical DAOs due to their programming contributions while becoming core members of cultural DAOs due to their artistic taste. They can choose to exercise governance rights in DAOs that uphold shared ideals while allocating assets in DAOs that provide better financial services.
This ability to precisely configure individual multidimensional rights across different digital city-states marks humanity's first achievement of low-cost, comprehensive freedom of choice.
4.3 Governance Competition: The "Attraction Competition" of Institutions and Culture
The extremely low cost of "chain migration" allows competition between DAOs to transcend traditional paradigms, evolving into a comprehensive "institutional attraction competition."
To attract and retain high-value "digital citizens," DAOs must continuously optimize their institutional offerings:
Political Attraction: More transparent governance, fairer voting, more reversible authorizations;
Economic Attraction: More reasonable tax systems, richer profit opportunities, stronger public services;
Cultural Attraction: More inclusive community atmospheres, clearer values, more vibrant creative ecosystems.
This competition will give rise to unprecedented institutional innovations, akin to the prosperity of free city-states in history. Ultimately, the quality of governance and the vitality of culture will directly determine the rise and fall of a digital city-state.
System Integration: The Emergence of DeSoc—A Dynamic, Organic Social Ecosystem
When "individuals" are fully confirmed on-chain, and their identity, credit, and governance participation continuously evolve in a data-driven, composable manner, society begins to exhibit a dynamically emergent structure.
It no longer relies on central planning or macro design but is generated by the free choices of billions of individuals and the automatic cooperation of smart contracts.
The essence of DeSoc (Decentralized Society) is this bottom-up order generation mechanism.
At the individual level: Each person, as a sovereign individual, possesses a digital identity that carries all their rights, obtains basic security through data assets and node income, achieves personal development through proof of contribution, and enjoys unprecedented autonomy and security.
At the governance level: DAOs engage in institutional competition to attract talent and attention, driving continuous optimization of governance models and forming an "open market for governance."
At the system level: The entire society exhibits dynamic, organic vitality. Power is effectively tamed (through reversible authorizations), innovation is greatly incentivized (through proof of contribution), and individual dignity and economic autonomy are fundamentally guaranteed.
In this system, power becomes temporary authorization, institutions become updatable code, and social contracts for the first time possess the potential for real-time evolution.
This is a reboot of human civilization: a society no longer bound by territory, identity, or institutions, spontaneously reborn in the world of bits.
Conclusion: Moving Towards a Self-Owned, Self-Governed, Self-Enjoyed Digital Age
The evolution of the "Trilogy of Blockchain Civilization" converges here, forming a solid logical loop:
We have revealed the tool for taming power—reversible authorization, transforming power from a monopoly into a service that individuals can control;
We have laid the cornerstone for civilization—Ethereum's trusted neutrality, global consensus, and programmability, constructing a permissionless, trustless foundational basis for DeSoc;
We have sketched the blueprint for a new society—beginning with "on-chain individuals," through the affirmation of identity, economic autonomy, and governance competition, ultimately arriving at a human-centered digital civilization.
This marks a profound migration of civilizational matrices: from the atom age, based on material and energy, to the bit age, built on data and information.
The laws of the atomic age are geographically bound, resource-scarce, and power-centralized. Social structures and institutions are shackled by the "atomic logic" of the physical world—everything has a position and weight, making migration difficult.
The paradigm of the bit age is global mobility, infinite replicability, and decentralized power. All elements of individuals and society—identity, assets, trust, and relationships—are deconstructed into programmable, composable, verifiable, revocable, and freely migratable bit units.
It transforms "identity" from full power agency into personal ownership;
It transforms "governance" from monopolistic management into self-governing service;
It transforms "revenue" from capital monopoly into creator enjoyment.
Lincoln's ideal of "government of the people, by the people, for the people" in the Gettysburg Address is endowed with a new era connotation, materializing from the grand narrative of the collective level into the life practices of each sovereign individual: "self-owned, self-governed, self-enjoyed."
This is—the bit age.
Reflections
If "on-chain individuals" become mainstream (with identity, history, and credit all on-chain), will your most essential "freedom" be amplified or diminished? Which freedoms will be amplified (rights of choice, migration rights, participation rights)? Which freedoms will be quietly tightened (right to be forgotten, right to start over, space for anonymous mistakes)?
In the narrative of the "sovereign individual," what do you fear more: others not treating you as a person, or the system taking you too seriously as a "computable person"?
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