Verified Pseudonymity as Governance Technology: Decentralized Identity, Soulbound Tokens, and Online Discourse

Abstract

Online discourse is increasingly degraded by incivility, harassment, ban evasion, and inauthentic participation—problems that scale as identities become cheap to create and abandon. This paper develops a comparative-institutional analysis of whether privacy-preserving digital identity can mitigate those harms without requiring blanket real-name disclosure. Decentralized identifiers, verifiable credentials, proof-of-personhood, and soulbound-token-style non-transferable attestations are analyzed as governance technologies: by creating durable pseudonymous identity and portable reputation, they raise the cost of Sybil attacks and sanction evasion, strengthen repeated-interaction incentives, and lower moderation and information costs. Their comparative advantage is on the civility, accountability, and authenticity margins—not on ideological polarization, which is independently driven by homophily, selective exposure, and ranking systems. I model online discourse as a club-governed informational commons and evaluate decentralized verified pseudonymity against four alternatives: doing nothing, real-name rules, centralized verification, and purely algorithmic moderation. Then, I extend the architecture with a community-currency layer that separates priced access from governance rights. The argument closes with implications for platform design, legal compliance, and empirical evaluation.

Keywords: Soulbound Tokens, Decentralized Identity, Anonymity, Online Incivility, Polarization

JEL Classification: D83, D85, L86, O33, K24