Wallet Identity

Overview

Identity can involve public keys, addresses, decentralized identifiers, account labels, authentication records, attestations, provider profiles, or verified ownership evidence. It may describe who controls a wallet, who benefits from its assets, or which application created a session.

Control, ownership, and legal identity are different claims. A custodian or delegated signer can control assets for another party, and a signed challenge only proves access to particular authority at that moment. Public address clustering and labels can also be wrong or privacy-invasive.

Systems should state which identity claim is being made, its evidence, issuer, time, scope, and confidence. Verification should use a unique challenge and avoid requesting private keys or seed phrases. Sensitive links between people and addresses need access and retention controls. Identity changes and delegated authority should be recorded, while transaction decisions still require purpose and risk validation.

The Wallet Identity workflow operates through several distinct states: request creation, user or policy approval, signature generation, network submission, execution, confirmation, balance recognition, and accounting. For Wallet Identity, a wallet interface or provider response can report progress, but it cannot replace verified transaction and ledger evidence.

Wallet Identity should be distinguished from the asset balance and from the application that displays it. For example, a customer-facing success message does not prove that the intended transaction executed on the correct network; operations should verify execution and reconcile the result before irreversible fulfillment.

Material risks for Wallet Identity include credential compromise, malicious destinations, unsupported assets, wrong-network transfers, stale balances, compromised software, provider outage, privacy leakage, and inaccessible recovery material. For Wallet Identity, controls should reflect value, automation, reversibility, and whether the organization or a third party controls signing.