The Birth of the Sovereign Individual: From "Onboarding Individuals onto the Chain" to DeSoc under Contestable Governance
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The Birth of the Sovereign Individual: From "Onboarding Individuals onto the Chain" to DeSoc under Contestable Governance
This article elaborates on DeSoc with "sovereign individual" at its core from three systemic layers: identity, economy, and governance.
Navigating Web3 tides with focused insightsAuthor: LXDAO
This article is the final chapter of the "Trilogy of Blockchain Civilization," aiming to outline a prototype of a decentralized society (DeSoc). We argue that civilization is undergoing a substrate migration—from the atomic era into the bit era. In this context, Ethereum shows potential as a meta-framework for civilization—a "correctable system" enabling social institutions to continuously iterate in a low-cost, programmable environment.
The upper limit of this framework begins with its most fundamental unit—the individual. This paper argues that as RWA (real-world assets) on-chain efforts gain initial scale, the holistic mapping of ideas, culture, and RWOs (real-world organizations) will depend on "the onboarding of people onto the chain." Personal rights such as identity, credit, capability, and social relationships must be reliably mapped, freely transferable, and combinable to enable the on-chain reconstruction of social structures.
Based on this, this article elaborates a DeSoc centered on the "sovereign individual" across three layers—identity, economy, and governance: individuals, leveraging their digitized on-chain rights and assets, can migrate at low cost between multiple DAOs (digital city-states), thereby driving governance optimization and ultimately forming a competitive governance landscape, ushering in a new chapter of the bit era.
Keywords: decentralized society; sovereign individual; onboarding of people onto the chain; data assetization; universal basic income; bit era.
Introduction: Eternal Migration—From Geographic Frontiers to Digital Territories
Freedom of movement is humanity’s oldest and most fundamental right. Before nation-states and fixed borders emerged, tribes and families could migrate according to survival and security needs, choosing better environments. This mechanism of using migration as feedback was the original check on power—it does not eliminate power, but ensures power remains replaceable.
Agricultural civilization and state-building restricted this freedom: populations became tied to land, and power anchored individuals to their birthplaces through "irrevocable delegation," transforming the social contract from a dynamic reciprocal relationship into a static constraint. Individual migration costs were high, and reclaiming power was difficult.
Yet the pursuit of individual freedom has never disappeared, giving rise to two major trends:
1. Vertical escape: individuals emigrate to seek freer, more prosperous legal societies, actively choosing governance and services.
2. Horizontal unification: nation-states integrate to access higher-level public goods, expanding mobility rights and market boundaries.
These two trends point toward a core demand: people continually seek a domain where "voting with feet" can be achieved at lower cost and higher efficiency.
Now, blockchain technology, especially DeSoc on Ethereum, is opening a third path: building an entirely new digital territory. Here, the right to "vote with feet" is natively and affordably restored to every individual by technology.
This article aims to demonstrate that DeSoc, starting from "onboarding people onto the chain," represents the latest chapter of humanity's eternal journey toward freedom in the digital age. It will ultimately dismantle the concept of "irrevocable delegation" and accelerate civilization’s evolution into the bit era.
Identity Layer—From "Data Exposure" to "Sovereignty of the Individual"
1. Theoretical Foundation: From SBT to the Vision of "Social Composability"
In writings such as "Decentralized Society: Finding Web3's Soul" and "What I Think About Biometric Identity Proofs," Vitalik Buterin laid the theoretical foundation for the next-generation identity system. His concept of "soul-bound identity" centers on SBTs (soul-bound tokens)—not another financial asset, but non-transferable credentials carrying an individual’s social history, credit, and contributions. The ultimate goal of this system is to build social composability—enabling each independent "person" to have a verifiable, trustworthy, and incentivizable social foundation on-chain.
2. Technical Architecture: Sovereign Identity Stack and Standardization Process
The vision of "onboarding people onto the chain" is moving from theory to 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: Root of Sovereignty and Standardized Identity Anchor
Decentralized Identifiers (DIDs) compliant with W3C standards empower individuals to generate and fully control their "root identity." On Ethereum, this concept is concretized via EIP-4361 (Sign-In with Ethereum, SIWE), which allows users to log in to third-party applications directly using their Ethereum accounts, decentralizing authentication and marking a key step toward returning identity sovereignty to individuals. Meanwhile, EIP-712 (structured data signing) ensures security and user experience when DIDs sign complex, readable off-chain claims (such as identity credentials).
2.2 Zero-Knowledge Proofs: Shield of Privacy and Engine of Verifiable Credentials
Zero-knowledge proofs (ZK) serve as the privacy-enhancing layer within the identity stack. Through cryptographic mechanisms that are "verifiable yet invisible," they ensure the authenticity of identity claims (e.g., "I am over 18") without requiring full data exposure (e.g., date of birth). While ZK itself is a cryptographic primitive, its application in identity is being advanced by exploratory proposals like ERC-5833 (privacy-compliant composition of soul-bound tokens), aiming to address SBT challenges in compliance and privacy.
2.3 SBT: Soul of Society and Container of On-Chain History
As data containers and modules for social history, SBTs are being defined and refined through multiple ERC proposals. Their core idea originates from ERC-721 (non-fungible token standard), but the critical feature of "non-transferability" is granted by dedicated extension standards: ERC-4973 and ERC-5192 (minimal soul-bound token) are two competing proposals aiming to define SBT core logic, both injecting "non-transferability" into tokens and binding metadata to identity. Additionally, ERC-1155 (multi-token standard), due to its efficient batch processing, is often considered for issuing and managing large volumes of composable SBT credentials, thus constructing the programmable social DNA of individuals in the digital world.
This community-standard-based tech stack—comprising DID (EIP-4361/712) + ZK (privacy enhancement) + SBT (ERC-4973/5192/1155)—forms the foundational, interoperable architecture enabling DeSoc to evolve from whitepapers to smart contracts.
3. Ecosystem Practice: Early Map of On-Chain Identity
Currently, identity experiments in the Ethereum ecosystem exhibit "fragmented exploration."
A number of cutting-edge projects are working to translate abstract identity theories into concrete digital personality networks:
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Lens Protocol / Farcaster: Putting social graphs on-chain, making social relationships and influence portable, verifiable assets.
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Worldcoin: Despite controversy, its attempt to verify "human uniqueness" via biometrics reveals a path toward Sybil resistance and inclusive identity distribution.
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Proof of Humanity / Idena: Using different "proof-of-humanity" mechanisms to distinguish real individuals from fake identities on-chain, safeguarding the authenticity foundation of DeSoc.
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Gitcoin Passport / ENS: Integrating on-chain contributions, domain identities, and reputation credentials to build quantifiable foundational profiles for individual social capital.
These practices resemble puzzle pieces—achieving breakthroughs in single dimensions like social interaction, identity, or biometrics, objectively creating "multi-source reputation fragments"—but have yet to achieve the "composable digital persona" required by DeSoc.
In this context, explorations by projects like Credinet become particularly important. They go beyond isolated descriptions of a person's attributes, integrating tools like MACI (verifiable computation tool for anti-manipulation interactions) to build a digital identity framework allowing users to carry and prove multidimensional credit fragments. Starting from multiple independent ZK proof modules, the project constructs a "Lego-style" profile of individual rights—continuously updatable, verifiable, and composable—to achieve goals of "unified profile + fragmented rights + privacy coercion resistance + decentralized governance."
4. Real-World Motivation: From Industry Pain Points to Civilizational Infrastructure
Building decentralized identity is not merely technological evolution, but a rigid necessity for blockchain’s practical development.
Industry driver: Advanced financial applications such as insurance, credit, and decentralized governance rely on trusted identities for accurate risk pricing and incentive allocation.
Civilizational driver: Within Ethereum’s grand narrative, DeSoc is not a simple extension of DeFi, but a paradigm shift in social structure. Establishing trusted identity infrastructure is the bedrock of a new civilization.
Competitive driver: The next growth curve should not be trapped in DeFi’s self-consuming competition, but shift toward building foundational infrastructure like the identity layer—with positive externalities and network effects—fully leveraging Ethereum’s irreplaceable advantage of credible neutrality.
Conclusion: When an individual’s credit, capabilities, and relational networks become portable, freely migratable digital assets, humans regain a crucial freedom in the digital world—migration.
Thus, building the identity layer is far more than a technical upgrade. It is the ultimate confirmation of individual rights, and the historic starting point for Ethereum civilization’s transition from "capital contracts" to "social contracts." From now on, people are no longer prisoners of algorithms, but true sovereign nodes in the on-chain world.
With this identity layer established, "people" become unique, unmistakable entities with complete histories and reputations in the digital world for the first time, providing a trusted atomic unit for all subsequent socioeconomic activities.
Economic Layer: Ecological Restructuring from "Financial Legos" to "Social Legos"
When credible, rich digital identities become reality, market systems based on credit will emerge. Individuals can transcend geographic boundaries, evolving from "digital nomads" into "digital citizens," living and creating within a new economy built on algorithmic trust.
3.1 Credit as Capital: Rise of Personality-Based Finance
When trusted identity becomes commonplace, a financial market based on personal credit can be built.
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DAO members can issue "reputation bonds" (debt instruments backed by future labor or contribution earnings) using SBTs;
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Open-source developers can obtain "trust loans" based on contribution records;
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High-reputation communities can even issue stablecoins backed by collective credit.
Financial barriers are completely dismantled. Trust is dynamically defined by algorithms and real-time behavior. Finance returns to its essence—quantified expression of social trust. Henceforth, financial activity is no longer the exclusive game of capital, but a natural extension of personal credit.
3.2 Reputation as Productivity: Birth of the Idea Market
When trusted identities carry rich personal histories, a new "idea market" is unlocked. All creative units, interactions, and evaluations accumulate into producers’ reputation portfolios. Knowledge can be securitized, influence can be invested in, collaboration can be quantified. In this new market, trusted individuals become the most productive. Thus, an "idea market" with trust as the settlement unit takes shape.
3.3 Identity as Institution: On-Chain Real Economy
Trusted identity systems provide institutional bridges between real-world and on-chain economies.
Organizations such as enterprises and communities can map their legal structures to on-chain sovereign identities, enabling complex relationships like equity, governance, and asset rights to be automatically executed via smart contracts.
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Company DAO-ification: Equity and voting rights represented by NFTs/SBTs.
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Community financialization: Governance rules and profit distribution encapsulated in code.
This enables a paradigm shift from "legal trust" to "algorithmic trust," laying a credible foundation for onboarding the real world.
3.4 Paradigm Shift in Economics: Endogenous Trust and Order Reconstruction
When the trusted individual becomes the basic economic unit, the entire economic paradigm shifts. Its core manifestations: transaction costs approach zero, while cost of wrongdoing approaches infinity.
Transaction Costs Collapse: Trust Becomes an Endogenous Mechanism
On-chain identity and credit systems eliminate three core frictions: information asymmetry, lack of trust, and enforcement difficulties. Trust transforms from an expensive external cost into a cheap, endogenous algorithmic property, enabling the economic system to leap from a high-friction society to a low-friction one.
Cost of Wrongdoing Soars: Credit Becomes Permanent Constraint
The non-transferability of SBTs permanently binds individuals to their behavioral records. A single fraud can damage on-chain credit, losing all collaborative opportunities until repaired. Under rational calculation, maintaining credit becomes the only optimal strategy.
Trust Civilization Arrives: From Rule of Law to Self-Governance
When transaction costs approach zero and the cost of wrongdoing approaches infinity, the foundation of social order shifts from external enforcement to internal constraints. Rule of law evolves into "trust自律," and regulation yields to "reputation constraints." We move from a "contract society" to a "credit civilization."
3.5 Rise of the Digital Nomad
When "people" are established as credible, rich digital entities, geographically unbound "digital nomads" truly evolve into digital citizens. Their basic economic source (UBI) consists of two parts.
Income from Data Assetization
A vibrant, trusted on-chain identity itself is a sustainable revenue-generating data asset. Individuals can authorize the use of their data to AI training, market analysis, and other demanders via data markets—while protecting privacy (e.g., through zero-knowledge proofs)—thus earning steady, passive data income.
Node Network Income
By providing foundational resources to the network (e.g., PoS staking, storage/computing power from DePIN devices), individuals earn corresponding network maintenance rewards. Together with data asset income, this forms the universal income base ensuring basic economic security in DeSoc.
Governance Layer: From "Full Delegation" to "Bit-Based Authorization"
The essence of power lies in the possession and control of others' rights. Since the emergence of political society, such power has originated from the individual's cession of rights.
In the imperial era, rights were ceded once and for all, irreversibly—even descendants’ rights were permanently transferred. In the constitutional era, rights are ceded periodically according to election cycles.
The commonality of these two models: rights are ceded long-term and in totality.
When rights are wholly and permanently transferred, individuals lose the fundamental leverage to counterbalance power. Freedom of movement then becomes the ultimate defensive mechanism against power.
When individual rights become decomposable, composable, and migratable on-chain data—no longer locked by geographical boundaries—this defensive mechanism is permanently activated by technology. The millennia-old structure of political power thus undergoes fundamental restructuring: power is forced to shift from monopoly to competition, from coercion to service. RWOs and RWEs (real-world everything) will be redefined and rapidly iterated under this new power paradigm.
4.1 DAO: Institutional Experiments as "Digital City-States"
Every DAO—whether aimed at protocol management, community operation, or investment—can be seen as a miniature "digital city-state." They possess:
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Written constitution: charters and governance rules encoded in smart contracts;
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Independent treasury: community funds managed by code;
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Citizenry: rights-bearing participants composed of token holders and contributors.
4.2 Precision of Freedom: "Chain Migration" and Multi-Dimensional Identity Configuration
In the physical world, immigration means a costly, difficult, bundled switch of political affiliation, economic environment, and cultural life.
In DeSoc, "chain migration" enables unbundling and fine-tuning of freedom. An individual can enjoy high reputation in a technical DAO due to programming contributions, while simultaneously becoming a core member of a cultural DAO due to artistic taste. He can exercise governance rights in DAOs aligned with his values, while allocating assets in DAOs offering superior financial services.
This ability to precisely configure multidimensional personal rights across different digital city-states marks humanity’s first achievement of low-cost, comprehensive free choice.
4.3 Governance Competition: A "Competition of Attraction" in Institutions and Culture
The extremely low cost of "chain migration" pushes competition among DAOs beyond traditional paradigms, evolving into an all-encompassing "competition of institutional attraction."
To attract and retain high-value "digital citizens," DAOs must continuously optimize their institutional offerings:
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Political attractiveness: more transparent governance, fairer voting, more reversible authorization;
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Economic attractiveness: more reasonable tax systems, richer earning opportunities, stronger public services;
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Cultural attractiveness: more inclusive community atmosphere, clearer values, more vibrant creative ecosystems.
This competition will foster unprecedented institutional innovation, much like the prosperity of historical free city-states. Ultimately, the quality of governance and vitality of culture will directly determine the rise and fall of a digital city-state.
System Integration: Emergence of DeSoc—A Dynamic, Organic Social Ecosystem
When "people" are fully recognized 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 emerges from the free choices of billions of individuals and the automatic coordination of smart contracts.
The essence of DeSoc (decentralized society) is precisely this bottom-up order generation mechanism.
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Individual level: Each person, as a sovereign individual, holds a digital identity carrying all their rights, gains basic security through data assets and node income, achieves personal development via contribution proofs, and enjoys unprecedented autonomy and safety.
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Governance level: DAOs compete institutionally for talent and attention, driving continuous governance optimization and forming an "open market for governance."
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System level: The entire society exhibits dynamic, organic vitality. Power is effectively tamed (through reversible authorization), innovation is greatly incentivized (through contribution proofs), and individual dignity and economic autonomy are fundamentally secured.
In this system, power becomes temporary authorization, institutions become updatable code, and social contracts gain real-time evolvability for the first time.
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: Toward a Bit Era of Self-Ownership, Self-Governance, and Self-Benefit
The reasoning of the "Blockchain Civilization Trilogy" converges here into a solid logical loop:
We revealed the tool to tame power—reversible authorization—transforming power from a monopoly into a service individuals can wield;
We laid the foundation for civilization—Ethereum’s credible neutrality, global consensus, and programmability—providing DeSoc with a permissionless, trustless base layer;
We outlined the blueprint of a new society—beginning with "onboarding people onto the chain," progressing through identity recognition, economic autonomy, and governance competition, ultimately arriving at a human-centered digital civilization.
This marks a profound substrate shift in civilization: from the atomic era grounded in matter and energy, to the bit era built upon data and information.
The laws of the atomic era are geographic binding, resource scarcity, and centralized power. Social structures and institutions are constrained by the "atomic logic" of the physical world—everything has position and weight, migration is hard.
The paradigm of the bit era is global flow, infinite replicability, and decentralized power. Every element of individuals and society—identity, assets, trust, and relationships—is deconstructed into programmable, composable, verifiable, retractable, and freely migratable bit units.
It turns "identity" from full delegation into personal ownership;
It turns "governance" from monopolistic management into self-governed service;
It turns "benefits" from capital monopoly into creator self-benefit.
Lincoln’s ideal in the Gettysburg Address—"of the people, by the people, for the people"—here gains new contemporary meaning, shifting from a grand collective narrative to the lived practice of every sovereign individual: "of myself, by myself, for myself."
This is—the bit era.
Reflection
1. If "onboarding people onto the chain" becomes mainstream (identity, history, credit all on-chain), will your most fundamental "freedom" be amplified or diminished? Which freedoms will expand (choice, mobility, participation)? Which will quietly tighten (right to be forgotten, right to restart, space for anonymous mistakes)?
2. In the narrative of the "sovereign individual," what do you fear more: others not treating you as a person, or the system taking too seriously your identity as a "computable person"?
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