Digital Identities
Digital Identities are non-transferable NFTs issued to verified users and smart contracts. They serve as the foundational compliance layer that enables tokenized stocks to exist in DeFi—securely and legally.
All tokenized stocks on DCLEX are permissioned assets. They can only be held or transferred between wallets or smart contracts that possess a valid Digital Identity. Any attempt to transfer tokens to an unverified address is automatically blocked at the smart contract level—ensuring full compliance with securities laws while preserving decentralization.
Key Features
Seamless Verification: Enables compliant access to tokenized stocks in DeFi without exposing personal data on-chain.
Immutable & Non-Transferable: Digital Identities are soulbound ERC-721 tokens that cannot be transferred or burned—guaranteeing unique, permanent identity on-chain.
Interoperable: Built using the ERC-721 standard for compatibility with third-party DeFi protocols.
Account Recovery: Lost wallet? No problem. Users can reverify on DCLEX to securely recover their Digital Identity to a new wallet.
User Verification
To obtain a Digital Identity, users must complete a one-time verification process. Once approved, they can mint their Digital Identity to their Ethereum wallet—unlocking full access to tokenized stocks and DeFi functionality.
Verification Requirements:
Government-issued ID (passport, driver’s license, or national ID)
Proof of residency (e.g. utility bill or bank statement)
Ethereum wallet
Account Recovery
If a user loses access to their wallet, their Digital Identity can be securely recovered through re-verification.
Recovery Process:
Log in to DCLEX with a new Ethereum wallet
Navigate to Digital Identity → Recover my identity
Complete the verification process
Transfer your Digital Identity and tokenized stocks to the new wallet
Smart Contract Identities
Smart Contract Identities (SCIDs) are Digital Identities held by smart contract accounts.
SCIDs allow DeFi applications to own and transfer tokenized stocks.
SCID Issuance Process:
Proposal: Submit smart contract for review via the DCLEX dashboard
Audit: DCLEX verifies the source code for compliance and security
Issuance: A Digital Identity is minted to the smart contract address
Compliance by Design
Digital Identities allow DCLEX to enforce KYC/AML requirements directly within smart contracts. This enables a unique balance between user privacy, DeFi composability, and institutional-grade compliance.
Smart Compliance: Dynamic Restrictions
DIDs and SCIDs include programmable enforcement logic. If a user or protocol is flagged (e.g. for fraud or sanctions), DCLEX can instantly revoke their identity.
Geographic Adaptability
Digital Identities include metadata such as tax residency, enabling DeFi applications to comply with regulatory requirements of multiple jurisdictions.
Setting the Standard
The Digital Identity system is more than a feature—it’s a framework for scalable, compliant finance on-chain. While it powers DCLEX’s tokenized stock ecosystem today, its modular architecture makes it applicable to any financial product seeking compliance in DeFi.
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