Cardano Foundation Introducing the Identity Wallet

Published 12.12.2023

Cardano Foundation announced the development of the Identity Wallet. The wallet will enable the creation of a decentralized identity (DID). It will support new and existing identity standards, multiple ecosystems, and frameworks.

Identity Wallet

The Cardano Foundation's announcement of the development of a new wallet came as a surprise to the community. We can speculate if it was a Christmas present. In any case, we can look forward to another product that can support adoption and bring new functionality that has been talked about for a long time.

For the Cardano ecosystem, the topic of decentralized identity is an old one. Cooperation with the Ethiopian government was announced in Africa Special. It was agreed to build a system providing a decentralized identity to the education sector, i.e. to pupils and teachers. An identity management solution named Atala PRISM was to be used. Cardano was to be used as public infrastructure.

I expected Atala PRISM to be available to the entire ecosystem and to integrate with Cardano wallets much sooner. The first official announcement of a wallet supporting DID came from the IOG team. The IOG team is working on the Lace wallet, which should also support DID in the future.

Cardano Foundation introduces Identity Wallet. It is already obvious from the name that the key feature will be the support of a decentralized identity. This is a feature that can set this wallet apart from others and move the crypto industry closer to the Web3 world. However, I expect many other wallets to support DID in the future.

What can we look forward to?

Identity Wallet will be a wallet compatible with W3C standards. Initially only available for the Cardano ecosystem and later for other blockchains. In this regard, the target audience is the same as in the case of Lace Wallet. Identity Wallet can enable the onboarding of all users into the Cardano ecosystem. Unifying the user interface and making it easier for users to use on-chain services regardless of the specific blockchain is important for entering Web3.

Identity Wallet will support multiple identity and credential standards. It will be possible to use the wallet with all existing services, but mainly with those that are yet to start supporting DID.

Identity Wallet will enable seamless interaction with applications on Cardano. This can be a challenge, especially for those who install a wallet to hold BTC and use DID. Will these people be able to easily buy tokenized dollars for BTC in one click through the DEX on Cardano? This would be perfect. However, we will have to wait for the result.

There is a mention of social recovery of the wallet on GitHub.

Social recovery refers to a mechanism that allows a user to regain access to their wallet even if they lose their private key or forget their password. It operates through a smart contract deployed on the blockchain and involves the use of guardians. Social recovery provides an extra layer of security and peace of mind, as it mitigates the risk of losing access to funds due to forgotten credentials or lost passphrases.

The community is asking if Atala PRISM will be used as a DID solution for Identity Wallet. I couldn't find a clear answer anywhere. Some community members who may have insight into the internal processes of the Cardano Foundation believe that this solution will not be used.

You can see the project architecture in the image below.


Two multi-platform wallets with DID support are currently being built in the Cardano ecosystem. Lace Wallet by IOG and Identity Wallet by Cardano Foundation. I wonder if it wouldn't be better to join forces and not focus on the development of one wallet that could be brought to market faster. On the other hand, a competitive environment and diversity is healthy. IOG and Cardano Foundation are two independent entities with their agenda. If we see at least one DID-enabled wallet in 2024, it will be a positive event. During the bull market, many new users come to crypto. It would be nice to allow them easy access to crypto through a multi-platform wallet, including the possibility of creating a decentralized identity.


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