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Identity protocols issue DIDs linked to library membership VCs, storing borrowing history and fines securely. Patrons prove eligibility (e.g., residency, age) via ZKPs without sharing personal data. Smart contracts automate loan durations and renewals, while blockchain audit trails track item history. Interoperable DIDs enable cross-library access, and decentralized storage (e.g., Ceramic) hosts digital resources, reducing centralization risks.