Quantum-Resilient Blockchain for Secure Digital Identity Verification in DeFi

The rapid evolution of quantum computing poses significant threats to traditional cryptographic schemes, particularly in Decentralized Finance (DeFi) systems that rely on legacy mechanisms like RSA and ECDSA for digital identity verification. This paper proposes a quantum-resilient, blockchain-based identity verification framework designed to address critical challenges in privacy preservation, scalability, and post-quantum security. The proposed model integrates Post-quantum Cryptography (PQC), specifically lattice-based cryptographic primitives, with Decentralized Identifiers (DIDs) and Zero-knowledge Proofs (ZKPs) to ensure verifiability, anonymity, and resistance to quantum attacks. A dual-layer architecture is introduced, comprising an identity layer for credential generation and validation, and an application layer for DeFi protocol integration. To evaluate its performance, the framework is tested on multiple real-world DeFi platforms using metrics such as verification latency, throughput, attack resistance, energy efficiency, and quantum attack simulation. The results demonstrate that the proposed framework achieves 90% latency reduction and over 35% throughput improvement compared to traditional blockchain identity solutions. It also exhibits a high quantum resistance score (95/100), with successful secure verification under simulated quantum adversaries. The revocation mechanism—implemented using Merkle-tree-based proofs—achieves average response times under 40 ms, and the system maintains secure operations with energy consumption below 9 J per authentication cycle. Additionally, the paper presents a security and cost tradeoff analysis using ZKP schemes such as Bulletproofs and STARKs, revealing superior bits-per-byte efficiency and reduced proof sizes. Real-world adoption scenarios, including integration with six major DeFi protocols, indicate a 25% increase in verified users and a 15% improvement in Total Value Locked (TVL). The proposed solution is projected to remain secure until 2041 (basic version) and 2043 (advanced version), ensuring long-term sustainability and future-proofing against evolving quantum threats. This work establishes a scalable, privacy-preserving identity model that aligns with emerging post-quantum security standards for decentralized ecosystems.