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One thing to remember is that DID is not an authentication system per se and thus cannot be compared with OAuth2.
DIDs are merely unique identifiers (hence the nam Decentralized IDentifier), that can be used to derefence informatino about the holder, such as service endpoints, public keys, etc. This is comparable to your personal website where you publish information about yourself.

Similarly, VerifiableCredentials are merely a way to present claims about oneself that have been verified by a trusted (third) party, i.e. the issuer. This is comparable to presenting a driver's license.

By themselves, neither DIDs nor VCs provide any means to establish a secure channel or allow for a trusted …

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@harnvo
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