What are SoulBound Tokens – The Nontransferable NFTs
Web3 is growing day by day. But now SBTs are the hot topic in the Web3 sector. SBT stands for SoulBound Tokens. SBT is still a new concept that has the potential to be a game changer for web3 and a truly decentralized society.
Origin of Soulbound Tokens: The popular online game World of Warcraft serves as the inspiration for soulbound’s logic. Soulbound items cannot be transferred or sold by players. Soulbound items are permanently “bound” to the player’s “soul” once they are picked up. The idea of Soulbound Tokens (SBT) was put forth in May 2022 by E. Glen Weyl, an economist, and Vitalik Buterin, the co-founder of Ethereum.
Soulbound Tokens: Soulbound tokens (SBTs) are Non-transferrable digital tokens (NFTs) that represent a user’s identity and connection to society without having any monetary value using blockchain technology. The concept is that a user’s crypto wallet, which may include different SBTs, will be referred to as a Soul.
Depending on the record classification, Owners may have multiple Souls. People could have numerous wallets (or souls) representing various aspects of their lives. For example, someone could have a “credential soul” for their work history and a “Medical soul” for their medical records. Souls, on the other hand, can represent an entity that distributes SBTs. Companies, for example, can be Souls, issuing SBTs to each employee. SBTs could be issued by a digital country club to verify membership status.
How Soulbound Tokens Are Different From Nonfungible Tokens: In most NFTs today such as Bored Yacht Club, People will buy, trade, or display NFTs as a symbol of status and wealth. SBTs seeks to expand the NFT concept beyond money and bragging rights by creating a token that is both unique and Non-transferable. An SBT represents a person’s or entity’s reputation whereas NFT represents their assets and digital collectibles. In addition, unlike NFTs, SBTs have no monetary value and cannot be traded once issued to a wallet.
Use Cases of SoulBound Tokens: The core idea behind Soulbound Tokens is to separate monetary value from interpersonal relationships and to advance a new paradigm of social trust. SBTs have numerous potential applications. Here are some examples that could be useful in everyday life.
- Educational Background: When a person graduates from a university they are awarded a course completion certificate upon successfully completing. In this case, the university is a soul that issues SBTs and students are the souls receiving them. Thus said SBT will keep the student’s credentials n order to authorize that he or she is a member of the university and possess the educational qualifications from the university.
- Job Applications or Work History: Job applicants could use official SBTs issued by previous companies and institutions to submit all of their prior work history and professional certificates. The SBTs would serve as certificates of proficiency.
- Health Records: Using an SBT that stores a person’s medical records, switching doctors or healthcare providers could be sped up. The SBT, in theory, would replace the time-consuming process of filling out paperwork, verifying your medical history, and speaking with someone on the phone.
The unique features of soulbound NFT, demonstrate that nontransferable, nonfungible tokens, will be important n the web3. SBTs practical prototypes can be highly anticipated because it may take some time before they are used widely. However, the idea behind the SoulBound token project’s design is encouraging.
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