The Birth of Sovereign Individuals: From "Human On-Chain" to DeSoc under Competitive Governance

Written by: LXDAO

This article is the final chapter of the “Blockchain Civilization Trilogy” and aims to outline the prototype of a decentralized society (DeSoc). We believe that civilization is undergoing a matrix shift: from the atomic age to the bit age. In this context, Ethereum shows potential to become the foundational framework of civilization - a “self-correcting system” that allows social systems to continuously iterate in a low-cost, programmable environment.

The upper limit of this framework starts with its most basic unit - the individual. This article argues that as RWA (Real World Assets) begin to take shape on-chain, the overall mapping of cultural thoughts and RWO (Real World Organizations) will be predicated on “the on-chain of individuals.” The rights of individuals, such as identity, credit, ability, and social relationships, must be reliably mapped, freely migrated, and combined in order to achieve on-chain reconstruction of social structures.

Accordingly, this article elaborates on DeSoc, centered on the “sovereign individual,” from three systemic layers: identity, economy, and governance. Individuals can migrate at low cost among multiple DAOs (digital city-states) by leveraging their tokenized on-chain rights and assets, thereby driving governance optimization and ultimately forming a competitive governance landscape, opening a new chapter in the era of Bitcoin.

Keywords: decentralized society; sovereign individual; on-chain identity; data assetization; universal basic income; Bitcoin era.

Introduction: Eternal Migration - The Road to Freedom from Geographic Borders to Digital Realms

The freedom of migration is humanity's oldest and most fundamental right. Before the formation of nation-states and fixed borders, tribes and families could migrate according to their survival and security needs, choosing better environments. This mechanism of migration as feedback is a primitive constraint on power—it does not eliminate power, but allows it to always be replaceable.

Agricultural civilization and state construction tightened this freedom: the population was bound to the land, and power anchored individuals to their place of birth through “irrevocable authorization”. The social contract transformed from a dynamic reciprocal relationship into a static constraint. The cost of individual migration is high, and it is difficult for power to reclaim.

However, the pursuit of individual freedom has never disappeared, and has given rise to two major trends:

1. Vertical escape: individual immigrants seeking a freer and more prosperous rule of law society, achieving an active choice in governance and services.

2. Horizontal Integration: The fusion of nation-states to obtain higher-level public goods, expanding mobility rights and market boundaries.

These two trends point to a core demand: people are always seeking an arena where they can achieve “voting with their feet” at a lower cost and higher efficiency.

Today, blockchain technology, especially DeSoc on Ethereum, is opening a third path: building a brand new digital territory. Here, the right to “vote with your feet” is natively and cost-effectively re-empowered to every individual.

This article aims to argue that DeSoc, based on the “on-chain human” as a starting point, is the latest chapter of humanity's eternal migration for freedom in the digital age. It will achieve the ultimate deconstruction of “irrevocable authorization” and accelerate the evolution of civilization towards the Bitcoin era.

Identity Layer - From “Data Naked Running” to “Sovereignty in Man”

1. Theoretical Foundation: From SBT to the Vision of “Social Composability”

Vitalik Buterin laid the theoretical foundation for the next generation of identity systems in his writings such as “Decentralized Society: Finding the Soul of Web3” and “What Are My Thoughts on Biometric Identification?” The concept he proposed, “Soul-Bound Identity,” with its core vehicle SBT (Soul-Bound Token), is not another financial asset, but an untransferable 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 an identifiable, trustworthy, and incentivized social foundation on-chain.

2. Technical Architecture: Sovereign Identity Stack and Standardization Process

The vision of “human on-chain” is transitioning from theoretical to engineering reality through a series of Ethereum community standards (EIP/ERC). Its technological core is a three-layer “sovereign identity stack” driven by community consensus:

2.1 DID: The Root of Sovereignty and Standardized Identity Anchors

The decentralized identifiers 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 a decentralized method of authentication, which is a key step in the return of identity sovereignty to individuals. At the same time, EIP-712 (structured data signing) 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 Credentials Engine

Zero-Knowledge Proofs (ZK) serve as a privacy enhancement layer in the identity stack, ensuring the authenticity of identity claims (such as “I am over 18”) without exposing all data (like date of birth) through a “verifiable yet invisible” cryptographic mechanism. Although ZK is a cryptographic primitive in itself, its applications in the identity space are being driven by exploratory proposals such as ERC-5833 (a privacy-compliant framework for soulbound tokens), aimed at addressing the challenges of compliance and privacy for SBTs.

2.3 SBT: The Soul of Society and On-Chain Credential Container

As a data container for identity and a social履历 module, the form of SBT is being defined and optimized through multiple ERC proposals. Its core idea originates from ERC-721 (the non-fungible token standard), but the key feature of “non-transferability” is granted by specialized extension standards: ERC-4973 and ERC-5192 (minimum soulbound token) are two competing proposals aimed at defining the core logic of SBT, both injecting the property of “non-transferable” into the token and binding its metadata to identity. Moreover, ERC-1155 (the multi-token standard) is often considered for issuing and managing large amounts of composable SBT credentials due to its efficient batch processing capabilities, thus constructing an individual's programmable social DNA in the digital world.

This technology stack, composed of DID (EIP-4361/712) + ZK (privacy enhancement) + SBT (ERC-4973/5192/1155), based on community standards, is the foundational, interoperable architecture that allows DeSoc to evolve from a white paper to smart contracts.

3. Ecological Practice: Early Mapping of Personality on the Blockchain

Currently, the identity experiments in the Ethereum ecosystem exhibit the characteristics of “fragmented exploration.”

A series of cutting-edge projects are working to map abstract identity theories into concrete digital persona networks:

Lens Protocol / Farcaster: Bringing social graphs on-chain, making social relationships and influence portable and verifiable assets.

Worldcoin: Despite the controversy, its attempt to verify “human uniqueness” through biometric verification reveals a path to resist Sybil attacks and achieve inclusive identity distribution.

Proof of Humanity / Idena: Committed to distinguishing real individuals from false identities on-chain through different “Proof of Humanity” mechanisms, safeguarding the authenticity foundation of DeSoc.

Gitcoin Passport / ENS: By integrating on-chain contributions, domain identity, and reputation credentials, it builds a quantifiable foundational profile for individuals' social capital.

These practices are like a puzzle; although breakthroughs have been made in single dimensions such as social interactions, identity, and biometrics, they have objectively formed “multi-source reputation fragments,” but have not yet achieved the “composable digital persona” demanded by DeSoc.

In this context, the exploration of projects like Credinet becomes particularly important. They are no longer satisfied with the isolated description of a certain attribute of “people”, but instead integrate tools like MACI (a verifiable computing tool for anti-manipulation interactions) to attempt to construct a digital identity framework that allows users to carry and prove their multidimensional credit fragments. The project starts from multiple independent ZK proof modules to sustainably update, verify, and combine individual rights in a “Lego-style” portrait, aiming to achieve the goals of “unified portrait + fragmented rights + privacy against coercion + decentralized governance”.

4. Realistic Motivation: From Industry Pain Points to Civilizational Infrastructure

Building decentralized identity is not only a technological evolution but also a rigid demand for the development of blockchain reality.

Industry-driven: Advanced financial applications such as insurance, credit, and decentralized governance rely on trusted identities to achieve precise risk pricing and incentive distribution.

Civilization Driven: In the grand narrative of Ethereum civilization, DeSoc is not a simple extension of DeFi, but a paradigm revolution in social structures. Establishing a credible identity infrastructure is the foundation for building a new civilization.

Competition-driven: The next growth curve of the industry should not be trapped in the inward competition of DeFi, but should shift towards building underlying infrastructure such as identity layers that have positive externalities and network effects, fully leveraging Ethereum's irreplaceable advantages of trust and neutrality.

Conclusion: When individual credit, abilities, and relational networks become portable and freely migratable digital assets, humanity has regained a vital freedom—migration—in the digital world.

The construction of the identity layer is therefore much more than just a technological upgrade. It is the ultimate confirmation 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 rather true sovereign nodes in the on-chain world.

The construction of this identity layer has made it possible for “people” to become unique entities with complete history and reputation in the digital world for the first time, providing a reliable atomic unit for all subsequent socioeconomic activities.

Economic Layer: Ecological Reconstruction from “Financial Lego” to “Social Lego”

As trusted and rich digital identities become a reality, a credit-based market system will rise accordingly. Individuals will be able to break free from the constraints of geographical boundaries, evolving from “digital nomads” to “digital citizens,” living and creating in a new economic entity built on algorithmic trust.

3.1 Credit is Capital: The Rise of Personal Finance

When trusted identities become a universal reality, a financial market based on personal credit can be established.

DAO members can issue “reputation bonds” (a debt instrument backed by future labor or contribution earnings) with SBT.

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 have been completely dismantled. Trust is dynamically defined by algorithms and real-time behaviors. Finance returns to its essence — a quantitative expression of social trust. From now on, financial activities are no longer the exclusive game of capital, but a natural extension of personal credit.

3.2 Reputation is Productivity: The Birth of the Thought Market

When trusted identities carry rich individual histories, a brand new “thought market” can be unlocked. All creative entities, interactions, and evaluations become sedimented into a portfolio of the producer's reputation assets. 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, a “thought market” shaped by trust as the unit of settlement emerges.

3.3 Identity as a System: On-chain of the Real Economy

The trusted 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.

Company DAOization: Equity and voting rights are represented by NFT/SBT.

Community financialization: governance rules and profit distribution are encapsulated by code.

This realizes the paradigm shift from “legal trust” to “algorithmic trust,” laying a credible foundation for the on-chain in the real world.

3.4 Paradigm Shift in Economics: Endogenous Trust and Order Reconstruction

When trusted individuals become the basic unit of the economy, the operating paradigm of the entire economy shifts accordingly. Its core manifestation is: transaction costs approach zero, and the cost of wrongdoing approaches infinity.

Transaction costs collapse: Trust becomes an endogenous mechanism

The on-chain identity and credit system eliminates three core frictions: information asymmetry, trust deficit, and performance difficulties. Trust has transformed from an expensive external cost to a cheap intrinsic algorithmic attribute, thereby changing the economic system from

The transition from a high-friction society to a low-friction society.

The cost of wrongdoing has skyrocketed: credit has become a permanent constraint.

The non-transferability of SBT permanently binds individuals to their behavioral records. A single act of fraud can lead to damage to on-chain credit, resulting in the loss of all collaborative opportunities until the issue is resolved. Under rational calculation, maintaining credit becomes the only optimal strategy.

The Arrival of Trust Civilization: From Rule of Law to Self-Governance

As transaction costs approach zero while 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,” and regulation gives way to “reputation constraints.” We move from a “contractual society” to a “credit civilization.”

3.5 The Rise of Digital Nomads

Once individuals are established as trustworthy and rich digital entities, the “digital nomads” free from territorial constraints have truly evolved into digital citizens. Their basic economic source (UBI) consists of two parts.

Data assetization income

An active and trustworthy on-chain identity itself is a data asset that can sustainably generate income. Individuals can authorize their data usage rights to demand-side entities such as AI training and market analysis through a data marketplace, while ensuring privacy (e.g., through zero-knowledge proofs), thereby obtaining stable and passive data rights income.

Node Network Revenue

Individuals earn corresponding network maintenance rewards by providing basic resources to the network (such as PoS staking and storage/computing power of DePIN devices). This income, along with data asset income, forms the universal income basis that ensures basic economic security in DeSoc.

Governance layer: From “Full Power Agent” to “Bit-style Authorization”

The essence of power is the possession and domination of the rights of others. Since the birth of political society, this power has originated from the relinquishment of individual rights.

In the era of absolute monarchy, the transfer of power was one-time and irrevocable, and even the rights of future generations were permanently relinquished; in the constitutional era, the transfer of rights occurred based on election cycles.

The commonality between these two modes is that the transfer of rights is long-term in time and holistic in scope.

When power is wholly and permanently relinquished, individuals lose the fundamental leverage to check that power. Freedom of migration thus becomes the ultimate defense mechanism for individuals against power.

When individual rights are transformed into decomposable, combinable, and transferable on-chain data, no longer locked by geographical boundaries, this defense mechanism is technically and permanently activated. The millennium pattern of political power thus welcomes a fundamental restructuring: 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 paradigm of power.

4.1 DAO: As a system experiment of “Digital City-States”

Each DAO, whether its goal is to manage protocols, operate communities, or make investments, can be regarded as a micro “digital city-state”. They possess:

Written Constitution: Articles and governance rules encapsulated in the form of smart contracts;

Independent Finance: A community treasury managed by code;

Citizen Group: A rights entity composed of token holders and contributors.

4.2 The Refinement of Freedom: “Chain Migration” and Multi-Dimensional Identity Configuration

In the physical world, immigration means a one-time, bundled switch of political affiliation, economic environment, and cultural life, which is costly and difficult.

In DeSoc, “chain migration” achieves freedom of uncoupling and refinement. Individuals can enjoy a high reputation in the technical DAO for their programming contributions, while becoming core members of the cultural DAO due to their artistic taste. They can choose to exercise governance rights in a DAO that upholds shared ideals, while allocating assets in a DAO that provides better financial services.

The ability to accurately allocate individual multidimensional rights across different digital city-states marks the first time humanity has achieved low-cost, comprehensive freedom of choice.

4.3 Governance Competition: The “Attractiveness 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 attractiveness competition.”

To attract and retain high-value “digital citizens”, the DAO must continuously optimize its institutional offerings:

Political Appeal: More transparent governance, fairer voting, more reversible authorization;

Economic attractiveness: a more reasonable tax system, richer income opportunities, and stronger public services.

Cultural appeal: a more inclusive community atmosphere, more distinct values, and a more vibrant creative ecosystem.

This competition will give rise to unprecedented institutional innovations, just as 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 “people” on the chain are fully verified, and their identity, credit, and governance participation continuously evolve in a data-driven and composable manner, society begins to present a structure of dynamic emergence.

It no longer relies on central planning or macro design, but is generated by the free choices of billions of individuals and the automatic collaboration of smart contracts.

The essence of DeSoc (Decentralized Society) is this bottom-up order generation mechanism.

Individual Level: Each person, as a sovereign individual, possesses a digital identity that carries all their rights, gains basic protection through data assets and node income, realizes personal development through proof of contribution, and enjoys unprecedented autonomy and a sense of security.

Governance level: DAOs engage in institutional competition for talent and attention, driving continuous optimization of governance models, forming an “open market for governance.”

System level: The entire society presents dynamic and organic vitality. Power is effectively tamed (through reversible authorization), 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 the social contract for the first time has the possibility of real-time evolution.

This is a reboot of human civilization: a society no longer bound by territory, identity, or system, reborn spontaneously in the world of bits.

Conclusion: Marching towards an era of self-ownership, autonomy, and self-sharing in Bitcoin.

The evolution of the “Blockchain Civilization Trilogy” converges here, forming a solid logical closed loop:

We reveal the tool for taming power - reversible authorization, which transforms power from a monopoly into a service that can be harnessed by individuals;

We have laid the foundation for carrying civilization – the trusted neutrality, global consensus, and programmability of Ethereum, creating a permissionless and trustless underlying foundation for DeSoc;

We have outlined the blueprint for a new society - beginning with “human on-chain” as the prologue, through the affirmation of identity, economic autonomy, and competitive governance, ultimately reaching a human-centered digital civilization.

This marks a profound shift in the matrix of civilization: from the atomic era based on matter and energy to the bit era constructed on data and information.

The laws of the atomic age are geography-bound, resource-scarce, and power-centralized. Social structures and systems are shackled by the “atomic logic” of the physical world—everything has a position and weight, making migration difficult.

The paradigm of the era of Bitcoin is global flow, unlimited replicability, and power decentralization. All elements of individuals and society—identity, assets, trust, and relationships—are deconstructed into programmable, composable, verifiable, revocable, and freely transferable bit units.

It transforms “identity” from being fully represented by an agent to being owned by individuals;

It allows “governance” to transform from monopolistic management to autonomous service;

It allows “profits” to shift from capital monopoly to being enjoyed by creators.

Lincoln's ideal of “of the people, by the people, for the people” in the Gettysburg Address is endowed with a new era connotation here, transforming from a grand narrative on a collective level to the practical life of each sovereign individual: “of myself, by myself, for myself.”

This is - the Bitcoin era.

Think

1. If “human onboarding” becomes mainstream (identity, resume, credit all on-chain), will your most essential “freedom” be amplified or weakened? Which freedoms will be amplified (right of choice, right to migrate, right to participate)? Which freedoms will be quietly tightened (right to be forgotten, right to start over, space for anonymous mistakes)?

2. In the narrative of “sovereign individuals”, what you fear more is: others not treating you as a person, or the system taking you too seriously as a “calculable person”?