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Identity systems manage credential version compatibility through schema versioning and backward/forward compatibility protocols. W3C Verifiable Credentials (VCs) support multiple schema versions by embedding metadata (e.g., credentialSchema). Systems use JSON-LD context files to resolve semantic differences, while transformers convert legacy credentials to newer formats. Smart contracts or decentralized resolvers ensure validation across versions, and fallback mechanisms (e.g., proxy revalidation) handle deprecated schemas during transitions.

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