Selective Data Disclosure
Selective Data Disclosure is a design principle in decentralized identity where users are given granular control over what information they share with protocols. Rather than providing a full profile, a user can selectively disclose only the data points necessary for a specific transaction.
This minimizes the risk of over-sharing and empowers users to protect their personal information. In the context of derivatives, this means a trader can prove they have sufficient collateral or the correct professional status without disclosing their entire trading history or net worth.
This approach is enabled by cryptographic tools like selective disclosure credentials and zero-knowledge proofs. It creates a more secure and privacy-centric user experience, which is essential for building trust in decentralized financial systems.
By putting the user in charge of their data, it also reduces the data management burden for protocols.