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In short: Your personal data is stored encrypted and it requires your wallet signature to encrypt select data while hiding the rest. I.e. you can prove that you´re a real person, without revealing who you are.

Link to Anima
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How is KYC decentralized?

They verify you're data and document once. Then everything is stored encrypted in a way that it cannot be decrypted without your wallet signature. From that point on, you are the owner of your proof-of-identity and don't need any custodian

Now when another project requires KYC, they can ask for your age, citizenship or other select info (only the info they need!) and you can sign a message to your Anima vault that it releases only that select information.

It could even be anonymized further. As for instance, instead of returning your actual age, it could just return "adult".