A Soulbound token (SBT) is a non-transferable token that represents a person's identity or achievements. It is a type of non-fungible token (NFT) that cannot be bought, sold, or traded. SBTs are designed to be used for social identity in a decentralized society.

The concept of #Soulbound tokens was first proposed by Ethereum co-founder Vitalik Buterin in January 2022. In a blog post, Buterin called for the development of a new type of NFT that would be "immutable, non-transferable, and non-financial." He argued that SBTs could be used to represent a person's education, work experience, and other non-financial achievements.

In May 2022, Buterin and two other researchers, Glen Weyl and Puja Ohlhaver, published a white paper that further explored the concept of Soulbound tokens. The white paper, entitled "Decentralized Society: Finding Web3's Soul," laid out the foundation of a fully-decentralized society (DeSoc) governed by its users and how Soulbound tokens (SBTs) can function as the credentials we use in everyday life.

How do Soulbound tokens work?

Soulbound tokens are stored in a special type of wallet called a "Soul." Souls are designed to be non-custodial, meaning that the user has complete control over their tokens. This means that Soulbound tokens cannot be frozen or seized by a third party.

SBTs are issued by a variety of organizations, including universities, employers, and government agencies. When a person earns an achievement, such as graduating from college or getting a job, they are issued an #SBT that represents that achievement. The SBT is then stored in the person's Soul.

SBTs can be used to prove a person's #identity or qualifications. For example, a person could use their SBT to prove that they have a college degree or that they are a certified teacher. SBTs can also be used to track a person's progress over time. For example, a person could use their SBT to track their academic achievements or their professional development.

Benefits of Soulbound tokens

There are several benefits to using Soulbound tokens. First, SBTs are immutable, meaning that they cannot be changed or tampered with. This makes them ideal for representing important personal data, such as educational credentials or professional qualifications.

Second, SBTs are non-transferable, meaning that they cannot be sold or traded. This prevents fraud and ensures that SBTs are only used to represent genuine achievements.

Third, SBTs are stored in non-custodial wallets, which gives users complete control over their tokens. This means that Soulbound tokens cannot be frozen or seized by a third party.

Conclusion

Soulbound tokens are a new type of NFT that have the potential to revolutionize the way we think about identity and credentials. SBTs are immutable, non-transferable, and non-financial, making them ideal for representing important personal data. Soulbound tokens are also stored in non-custodial wallets, which gives users complete control over their tokens.

As the adoption of blockchain technology continues to grow, Soulbound tokens are likely to play an increasingly important role in our lives. SBTs could be used to represent our education, work experience, and other non-financial achievements. They could also be used to track our progress over time and to prove our identity to others.

Soulbound tokens have the potential to make our lives more secure, efficient, and transparent. They could help us to build a more trustworthy and equitable society.