Web3's initial focus has been on tokenization and smart contract applications, but its evolution suggests a need for an identity layer that incorporates social and financial capital, enabling new use cases beyond the current hyper-financialized landscape. Despite offering benefits like transparency and permissionless access, Web3 is limited by its reliance on on-chain addresses, necessitating a tech stack that fosters interactions based on personal identity elements such as reputation and social affiliations. This identity layer could facilitate trust-minimized, blockchain-based applications by incorporating official, social, and self-declared identity types through blockchains, credentials, and oracles. These identity solutions can empower a range of applications, from proving legal or social identity to verifying financial assets and interaction histories, enhancing trust and privacy while opening up new possibilities for decentralized communities and enterprises. As these innovations take shape, they are expected to integrate social capital into on-chain interactions, ensuring Web3 doesn't become overly financialized and promoting broader adoption in diverse sectors.