Mercle Updates: Cook wen?
Why did we start?
When we started Mercle, the goal was to build something in the Web3 space that would move beyond the core DeFi. The landscape was dominated by decentralized finance and other crypto financial use cases. Still, we believed that social identity would soon become critical in unlocking crypto adoption for the masses. What excited us was the potential to unlock true adoption by giving people control over their identity in a privacy-preserving environment. For years, big organisations like Google and Facebook have monetised this identity data for billions without sharing anything with the users.
Our first plan for the use case was simple - build for **network states or** **DAOs;** why? ****the whole idea of DAOs revolves around individuals working together for a shared goal, and a community-specific reputation framework seems sensible. The idea was to create a simple tool that allows these DAOs to issue **dynamic membership NFTs** with embedded proof of contribution for DAO members, helping them establish a reputation within their organizations. We launched our first product with Tachyon DAO, PUB DAO, and Talent DAO for the first two months. Soon, we realized that network states or DAOs are reasonably new concepts even for operators, and they have yet to figure out their sustainable business model before leveraging any of these identity management tools. The idea that DAOs would drive mass adoption of decentralized identity was wrong at that point. So, we pivoted.
This was the DAO version - Check this Loom Video
New Insights Emerged
We moved towards protocols once we realized DAOs weren’t the right fit. The reasoning was simple: these protocols have billions in their treasury, and when they are wanted to build for a use-case where users are willing or have the ability to pay, (This keeps us on the right track, and we are building something people are ready to pay for.) Our first significant collaboration was with Shapeshift, we started working with just with how we imagine community specific reputation and a Figma design. We planned to create custom solutions that allowed users to engage and receive rewards based on their participation in the Shapeshift ecosystem. From there, we started working with projects like Polygon and Jumper, gaining more market insight.
The Insight That Changed Everything
For all our previous attempts, we were primarily focused on two main objectives:
Identifying Relevant Interaction Data (between network and users to generate reputation identity), You can think of it as how users and networks interact with each other. For example, individuals create their social reputation based on their interaction with their friends and in different circumstances.
Application of Interaction Data: how reputation expression captured in step 1 could benefit the network. You can think of it as what this identity will change for the user. For example, having a considerably high number of followers on Instagram determines the influence of a particular creator.
At this point, we identified what could be the best answers to the above two.
Identifying Relevant Interaction Data: User interaction on-chain/off-chain that generates revenue for the network
Application: Token distribution for growth, retention and decentralisation.
The insight: Networks will perpetually distribute tokens for user interactions that generate value. You can think of it as the Loyalty program's intersection with Advertisement. Now, loyal users get to be the network owners while using the product instead of just getting normal discounts. A good reference: Li JinProgressive Ownership: A Model for Application Tokens
This insight validated an immediate use case specific to a crypto network, which will also help us bootstrap the initial reputational data for our identity layer.
Why use-case is important? Why not just build like others?
That’s the fundamental problem with all the previous attempts by the team for identity. Everyone just builds the infrastructure to store, access, and authenticate the identity data without spending enough time identifying the use case. For example, in the past, a16z, sequoia, and Coin Base have funded DeSo with 200M. There are a ton of similar examples.
We strongly believe having a solid use case is mandatory for the network's success.
In the last 10 months, we have been focusing on our SOM and have successfully helped major partners like Polygon, Jumper, ShapeShift, TraderJoe, SyncSwap and many more to distribute token incentives/rewards worth $5M+
Here's some stats to look into: STATS
The Future of Mercle: Democratizing Identity in a World Dominated by AI
Mercle’s mission is to build the most democratic identity network on the internet—one owned by humans, not bots. Our vision is to empower individuals with full control over their online identity, giving them complete ownership of their data and the ability to decide how, when, and by whom it’s accessed. Much like crypto wallets allow control over financial assets, Mercle’s decentralized identity system will let users take their identity data from one platform to another while staying in control.
In the future, users will have 100% ownership of their identity, and their identity data can be seamlessly integrated into different applications. While each platform may interact with this data differently, the core principle remains the same: the user controls how their information is used and shared.
Why Identity Matters More Than Ever
Identity isn’t just about who we are—it’s about how we present ourselves to the world and how others perceive us. In the digital age, this concept of identity is more important than ever, as it extends beyond social and cultural dimensions into the realm of online interactions.
At Mercle, we define identity through two components:
Intrinsic Identity: This is how you see yourself, independent of external labels or validation, shaped by your values, beliefs, and experiences.
External Social Identity: This is how others perceive you, which is fluid and dynamic, influenced by your reputation, behavior, and social roles.
In the age of AI-generated content, having a trusted identity network is essential. As more digital interactions become automated, verifying real human engagement will be key to maintaining trust and ensuring that value is fairly distributed.
Mercle’s Role in the New Internet Economy
The next wave of internet applications, especially in Web3, will focus on rewarding users for their participation. These applications will share ownership with users through tokens. To facilitate this equitably, we need a verifiable identity framework to ensure that these tokens go to real users with verifiable contributions.
Mercle is building a decentralized identity network that allows protocols to distribute rewards based on users’ dynamic reputation. Much like how GMX distributes tokens to loyal users for long-term engagement, Mercle's identity system ensures that ownership is distributed to those who actively contribute, making them stakeholders in the network.
As the ecosystem evolves, the use cases for Mercle’s identity network will expand beyond crypto-native applications to include other online communities like Discord, WhatsApp, and Reddit. Mercle’s goal is to create a framework that can handle identity verification at scale, ensuring that these communities are governed by transparent and decentralized principles.
A Future Built on Proof of Personhood
As AI continues to advance, making human-like behaviour increasingly easy to replicate, the need for proof of personhood becomes critical. Mercle's long-term goal is to integrate hardware-based human verification into its identity network. This will allow us to verify users in a way that ensures the authenticity of online interactions, keeping value distribution in the hands of real people.
Mercle’s identity network will be a cornerstone of the next iteration of web3 apps, allowing protocols to reward their users fairly and verifiably. The combination of decentralized identity and reputation systems will ensure that the internet’s future remains in the hands of its users, not automated agents or bots. Join us to make the world a hub of humans.
To answer why we’re a bit slow:
Polymarket was built from 2021
Pump.fun was building from 2022
Every good consumer dapp is not cooked in a few weeks, it takes some time.
The thing is - good products take time, and a building with community support takes even more time.
rekt not, we cooking.
