How to Secure Your Web3 Identity: Wallets, Sign-Ins & Avatars

1) What “Web3 identity” really means (2025)

Identity in Web3 is composable. Instead of one centralized username/password per app, you carry a cryptographic persona between apps: a wallet account (EOA or smart account), an optional name (ENS like you.eth), optional decentralized identifiers (DIDs), and a bag of verifiable credentials (VCs) that selectively prove things about you (age, accreditation, proof-of-personhood) without disclosing raw PII.

The security goal is continuity without compromise: rotate keys or rebuild devices without losing your public reputation, access rights, or ownership proofs. The UX goal is fewer signatures & clearer prompts: users shouldn’t read hex; they should review meaningful, human-readable messages.

2) Accounts: EOAs vs Smart Accounts (EIP-4337), and why it matters

Two account types dominate Ethereum-style ecosystems:

• EOA (Externally Owned Account): a single private key controls an address. It signs transactions directly. Examples: MetaMask, Rabby, native wallets.
• Smart Account (Account Abstraction): your wallet is a smart contract with programmable rules—spending limits, session keys, recovery guardians, and gas sponsorship. Popularized by EIP-4337.

In 2025, if you’re serious about security and usability, run a hybrid model: keep an EOA for legacy apps, but make your primary identity a smart account with recovery and session keys, using a reputable 4337 wallet. Developers should add EIP-6492 (signature validation for pre-deploy accounts) to support sign-ups before the account contract is deployed.

3) Sign-in methods: SIWE, WalletConnect, Passkeys, and EIP-1271

Three reliable patterns dominate Web3 authentication today:

1. SIWE (Sign-In With Ethereum, EIP-4361): the user signs a human-readable message that includes domain, statement, address, nonce, and expiry. Server verifies signature and issues a session.
2. WalletConnect: a transport layer/standard that connects dapps to many wallets across devices (scan a QR). Use it to deliver SIWE prompts or 712 transactions reliably. Docs
3. Passkeys (WebAuthn) bridged into smart accounts: users authenticate on devices with biometrics; the wallet/bundler translates this into 4337 UserOperations. This removes the “need ETH for gas” blocker at onboarding.

For smart accounts, sign-in uses EIP-1271 rather than ecrecover. Your server should support both: “EOA verify” or “1271 contract verify.” And to avoid replay on different chains, include a chainId or CAIP-10 account identifier in your SIWE domain string (see CAIP standards).

[Dapp] → (Create SIWE message w/ nonce, domain, chainId)
     → [Wallet signs]
     → [Server verifies: EOA (ecrecover) or 1271 (isValidSignature)]
     → [Issue HTTP-only session cookie; bind to nonce+origin; set short TTL]
     → [Refresh token via re-auth policy when needed]
    

4) ENS names, profiles & avatars: do it once, do it right

Ethereum Name Service (ENS) turns hex addresses into human-readable names and profile records. A well-configured ENS profile lets apps display your name, preferred address, avatar, website, and text records while you keep keys private.

Key records to maintain

• ETH / coin addresses: map you.eth to your smart account. Keep reverse records so your name appears when you sign.
• Text records: email, url, com.twitter, org.telegram, avatar, etc.
• Avatar: either a direct ipfs:// content hash or a link to an ERC-721 token image (many apps resolve token URIs).
• Contenthash: point to a small profile page on IPFS/Arweave; avoid heavy assets; keep a signed “proof of control” note inside.

5) DIDs & Verifiable Credentials (VCs): selective disclosure

The W3C DID (Decentralized Identifier) and VC (Verifiable Credentials) standards let issuers give you cryptographic attestations, age-over-18, accredited investor, KYC-passe which you can present to apps without exposing underlying PII. Wallets can store or fetch these credentials and produce ZK proofs that the statement holds.

• Pattern: Issuer → (VC) → You; You → (proof or VC presentation) → Verifier.
• Storage: client-side wallet vaults, encrypted storage, or DID hubs (e.g., Ceramic/IDX) depending on risk appetite.
• Revocation: use status lists or issuer endpoints so credentials can expire/revoke without re-issuing to everyone.

6) Privacy strategies: linking risk, separation, and ZK

On public ledgers, your actions are transparent. Most privacy loss comes from linking multiple accounts/behaviors through on-chain flows or off-chain breadcrumbs (emails, social handles). A practical model is compartmentalization:

• Separate accounts by role: public persona (with ENS), private spending, and long-term vaults. Avoid funding cross-flows that trivially link them.
• Use privacy-preserving proofs: ZK-attested KYC or uniqueness (proof-of-human). Prefer dapps that accept attestations instead of raw PII uploads.
• Off-chain care: new email for crypto accounts, avoid reusing handles, and minimize third-party trackers on your profile sites.

Note: Follow your jurisdiction’s laws. Privacy does not mean evading compliance. Seek apps that implement KYC/AML with minimal disclosure using VCs.

7) Threat model & phishing defenses

Most identity compromises stem from phishing, malicious approvals, or blind-signing typed data you don’t understand. Harden your daily habits:

• Never enter seed phrases online. Only in official wallet apps for restore. Support won’t ask for it.
• Use hardware signing for high-value actions; confirm recipient & amount on device.
• Prefer wallets that simulate transactions and decode calldata into human-readable actions.
• Review approvals monthly: revoke stale ERC-20/721/1155 allowances with tools such as Revoke.cash.
• Session keys: for games or frequent dapps, grant limited, expiring permissions instead of unlimited allowances.
• Domain hygiene: bookmark official sites; be wary of sponsored search results or DM “support.”

[Phishing Link] → Fake dapp → "Sign to continue" (EIP-712)
If you can't explain the fields, don't sign. Use wallets that simulate.
Prefer small, time-boxed session keys; avoid unlimited approvals.
    

8) Operational playbooks (solo, team, brand)

A) Solo user (creator, trader, or builder)

• Accounts: hot (daily), warm (smart account with limits), cold (vault) + social recovery.
• ENS: name → smart account; set reverse record; avatar on IPFS; basic text records.
• Sign-in: use SIWE with a privacy-safe email for account recovery notifications; enable 2FA on exchanges.
• Credentials: store VCs (age/residency/accreditation) for gated dapps; prefer ZK presentations.
• Backups: metal backups for recovery phrases/passphrases; periodic test restore on an offline device.

B) Team or DAO

• Treasury: multisig or smart-account module (threshold approvals) with labeled signers and spending limits.
• Roles: separate ops vs treasury wallets; require two-step for upgrades/bridge transfers.
• Identity: team ENS subdomains (e.g., alice.team.eth) mapped to smart accounts; org DID for issuing employment/role credentials.
• Runbooks: rotation process for departing staff; incident response; quarterly allowance reviews.

C) Brand or protocol

• Public identity: short, memorable ENS; verified social links in text records; contenthash → minimal landing page.
• Support channels: never DM first; publish signed statements on website and ENS contenthash for incident comms.
• Compliance: adopt VC-based KYC for restricted features; publish a data-minimization policy.

9) Developer section: secure SIWE backends & smart-account verification

A robust Web3 login has four pillars: (1) correct message, (2) server-side nonce verification, (3) signature verification for both EOAs and 1271 smart accounts, and (4) short-lived, HTTP-only session cookies.

example.com wants you to sign in with your Ethereum account:
0xAbC...123

By signing this message, you agree to the Terms at https://example.com/tos.
URI: https://example.com/login
Version: 1
Chain ID: 1
Nonce: b7f2c1d0-4aab-4e91-b3c1-0a...
Issued At: 2025-11-10T12:34:56Z
Expiration Time: 2025-11-10T13:04:56Z
Resources:
- https://example.com/privacy
      

import { SiweMessage } from 'siwe';
import { ethers } from 'ethers';

// 1) Parse & validate SIWE message text
export async function verifySiwe({ message, signature }: { message: string; signature: string }) {
  const siwe = new SiweMessage(message);
  const fields = await siwe.validate(signature);

  // 2) Check server-stored nonce (CSRF protection)
  const validNonce = await redis.get(`siwe:nonce:${fields.address}`);
  if (!validNonce || validNonce !== fields.nonce) throw new Error('Invalid nonce');

  // 3) Enforce domain/origin and expiry
  if (fields.domain !== 'example.com') throw new Error('Invalid domain');
  if (new Date(fields.expirationTime) < new Date()) throw new Error('Expired');

  // 4) Verify EOA or 1271
  const isEOA = await isEoaSignature(fields.address, message, signature);
  if (!isEOA) {
    const ok1271 = await isValid1271(fields.address, message, signature); // call isValidSignature
    if (!ok1271) throw new Error('Signature invalid (EOA/1271)');
  }

  // 5) Rotate nonce and issue short-lived session (HTTP-only cookie)
  await redis.del(`siwe:nonce:${fields.address}`);
  return { address: ethers.getAddress(fields.address), chainId: fields.chainId };
}

async function isEoaSignature(addr: string, message: string, sig: string) {
  try {
    const recovered = ethers.verifyMessage(message, sig);
    return ethers.getAddress(recovered) === ethers.getAddress(addr);
  } catch { return false; }
}

async function isValid1271(contractAddr: string, message: string, sig: string) {
  const iface = new ethers.Interface(['function isValidSignature(bytes32,bytes) view returns (bytes4)']);
  const hash = ethers.hashMessage(message);
  const data = iface.encodeFunctionData('isValidSignature', [hash, sig]);
  const res = await provider.call({ to: contractAddr, data });
  return res.slice(0,10).toLowerCase() === '0x1626ba7e'; // MAGICVALUE per EIP-1271
}
      

For pre-deployed smart accounts (user hasn’t paid to deploy the contract yet), support EIP-6492 so sign-ups work smoothly. And when you display “Sign” prompts, always use EIP-712 with clear domain separators and field descriptions.

10) Quick checklists & decision trees

Identity hardening checklist

• Adopt a smart account (4337) with guardians + spending limits.
• Move ENS name to your smart account; set reverse record; avatar → IPFS or token image.
• Split hot/warm/cold accounts; label addresses in explorers/wallet.
• Enable transaction simulation and typed prompts; refuse blind signs.
• Store VCs in a wallet vault; prefer ZK presentations; test revocation.
• Monthly: revoke stale allowances; rotate nonces/secrets; test recovery.

Should I use a single “everything” address?

Goal = simplicity only → OK for low-value users learning.
Goal = security/privacy/reputation → NO. Separate roles:
  [Public persona/ENS]   [Spending/dapp]   [Cold vault]
    

11) FAQ

12) Official docs & further reading

• Account Abstraction — EIP-4337
• Contract Signatures — EIP-1271
• Typed Data — EIP-712
• SIWE — EIP-4361
• Pre-deploy signature validation — EIP-6492
• WalletConnect — docs.walletconnect.com
• ENS — docs.ens.domains
• Ethereum Security (general) — ethereum.org/security
• DIDs — W3C DID Core
• Verifiable Credentials — W3C VC Data Model

Recap

• Anchor identity in a smart account with recovery & limits; keep an EOA for legacy compatibility.
• Use SIWE with nonce + origin checks; support EIP-1271 and EIP-6492 for modern wallets.
• Harden your ENS profile (reverse record, avatar on IPFS/Arweave) and avoid leaking PII.
• Adopt DIDs/VCs for compliance without data dumps; prefer ZK-attested proofs.
• Practice compartmentalization and monthly allowance reviews; never blind-sign.