This paper explores the core principles that should guide the construction and governance of identity in the metaverse and identifies the critical challenges that need to be addressed. Drawing on multidisciplinary theories and perspectives, we define metaverse identity and propose two core principles for understanding its intrinsic characteristics and impacts: Equivalence and Alignment, and Fusion and Expansiveness. The first principle asserts that metaverse identities should align with real-world norms and standards, which is crucial for establishing guidelines and safeguarding rights. The second principle emphasizes the need for seamless integration and boundless expansion of metaverse identities, transcending real-world limitations to accommodate diverse needs and foster inclusive participation. We argue that these two principles are vital for ensuring the accountability, inclusiveness, and consistency in the emerging metaverse era. Additionally, we identify five critical challenges: Identity Interoperability, Legal Implications, Privacy and Identity Management, Deepfakes and Synthetic Identities, and Identity Fragmentation and Psychological Well-being. We discuss potential strategies to navigate these challenges. The paper concludes by underscoring the importance of a proactive and collaborative approach to shaping the future of metaverse identity. As the metaverse continues to evolve, it is imperative that we understand and address the principles and challenges surrounding identity in this uncharted territory and work collectively to build a metaverse that fosters responsible identity construction and expression.

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