How Do You Verify Identity or Background Information for Web3 or Blockchain-Related Applications?

I am currently researching how identity verification and background checking processes work in Web3 or blockchain-based platforms. Many traditional systems require documents like police clearance, NBI clearance, or other official IDs, but I am not sure how this is handled in decentralized environments.

For example, in the Philippines, people often need NBI or Police Clearance for basic verification purposes. I run a small website that explains how to get these documents step-by-step, and you can see it here: https://phclearance.com/

My question is:

How do blockchain and decentralized platforms usually confirm a user’s identity or trust level without relying on traditional government-issued clearances?

I’m hoping to learn whether traditional verification methods (like police/NBI clearance) can still play a role, or whether Web3 projects use completely different methods.

If anyone here has experience building or auditing identity systems on blockchain, I’d really appreciate your guidance or suggestions.

Thanks!