What are Soulbound Tokens?
As mentioned, soulbound tokens are a type of cryptocurrency that is bound to a particular account or user. This means that once the token has been assigned to a specific user, it cannot be transferred or traded like other cryptocurrencies.
Soulbound tokens are designed to provide an added layer of security and control for users. By ensuring that tokens can only be used by the account to which they are bound, users can have greater peace of mind knowing that their tokens are less susceptible to theft or misuse.
How do Soulbound Tokens Work?
Soulbound tokens work by using a combination of blockchain technology and smart contracts. When a soulbound token is created, it is assigned to a particular account or user using a unique identifier such as a public key or wallet address.
Once the token has been assigned to the user, it is essentially locked to that account or user. This means that the token cannot be transferred or traded like other cryptocurrencies without first being unlocked or released from the user's account.
To unlock a soulbound token, the user typically needs to provide some form of verification such as a password or biometric identification. Once the token has been unlocked, it can then be transferred or traded like any other cryptocurrency.
Advantages of Soulbound Tokens
There are several advantages to using soulbound tokens, including:
Enhanced Security: By ensuring that tokens can only be used by the account to which they are bound, users can have greater peace of mind knowing that their tokens are less susceptible to theft or misuse.
Increased Control: By limiting the transferability of tokens, users can have greater control over their assets and how they are used.
Reduced Risk of Fraud: By making it more difficult to transfer or trade tokens, soulbound tokens can help to reduce the risk of fraud or other malicious activities.
Disadvantages of Soulbound Tokens
There are also some disadvantages to using soulbound tokens, including:
Reduced Liquidity: By limiting the transferability of tokens, soulbound tokens can be less liquid than other cryptocurrencies.
Potential for User Error: If a user forgets their password or loses access to their account, they may be unable to access or transfer their soulbound tokens.
Limited Functionality: Soulbound tokens may have limited functionality compared to other cryptocurrencies, as they are designed to be used primarily as a secure store of value rather than a medium of exchange.
Difference between NFTs and SBTs
One of the key differences between SBTs and NFTs is their purpose. SBTs are designed to raise capital for a project or company, while NFTs are used to represent a unique item or piece of content. SBTs are regulated by securities laws and must comply with regulatory requirements, while NFTs are not subject to the same regulatory oversight.
Another difference between SBTs and NFTs is their liquidity. SBTs are traded on regulated exchanges, which means that investors can easily buy and sell them. NFTs, on the other hand, are traded on decentralized marketplaces, which means that their liquidity can vary greatly depending on the demand for a particular item.
Binance's own SBT - Binance Account Bound token (BAB)
Binance Account Bound (BAB) tokens are the credentials of Binance users that have passed KYC. Since it is a type of Soulbound Token (SBT), it has three key properties: it is non-transferable, it cannot be transferred from one address to another, and it is revocable. It can be revoked by issuers. One UID can only have one BAB token at one time and on one chain.
The following information can be obtained from Binance website for BAB
Where can I view my BAB token?
The BAB token will be issued to the address you provided and you can check your BAB token on any third-party wallet that supports NFTs. Before you view your BAB token, you need to make sure your wallet network has selected the BNB Smart Chain.
What if I lost my access to the BAB token?
If you somehow lose access to your wallet, you can revoke the token with your Binance account. Once revoked, you can mint again after 72 hours.
Is there any way to transfer my BAB token to another address?
If you want to transfer your BAB token to another address, you can revoke it and then mint it to your new address. Please be aware that after you revoke your BAB token, you will have to wait 72 hours before you can mint again.
Incentives on BNB Chain for using BAB tokens
The following list outlines the relevant projects set to be the world’s first Web3 platforms to adopt Soulbound tokens:
Stader
Extra stake rewards up to 25% for BAB token holders. BAB token will also be used to identify unique KYCed users who can participate in the referral program. These holders can refer other BAB token holders and earn rewards.
Gunstar Metaverse
Claim Gunstar Metaverse Badge (GMB) which reduces Gunstar Metaverse Marketplace fee, increases attack & defense power in Battle PvP, offers free tickets or items monthly in Battle PvP, provides priority customer care (early access to news, events, recap, etc.), and offers free tickets for Gunstar metaverse events and tournaments.
Ancient8
Free-to-Mint Ancient8 x BAB Token OAT for all BAB Token holders. Simply complete the social tasks through Galxe and join the “Ancient8 Community Duathlon'' Tournament. Stand a chance to win part of a 1100 BUSD prize pool.
X Metaverse
X Metaverse will be awarding BAB token holders tier 3 Gems in their gaming ecosystem, providing holders special perks in PVP matches.
Plant Empires
Plant Empires have created a unique Lucky Wheel on their Dapp site. BAB token holders will receive many valuable rewards including in-game items and NFTs by spinning the wheel.
Izumi
Izumi is creating a universal giveaway for every BAB participant that participates in their campaign, with a prize pool of 1000USD up for grabs.
Yuliverse
BAB holders in Yuliverse will be entitled for an exclusive airdrop and in game characters.
Tap Fantasy
BAB holders that complete a task during the event would be entitled to a special Tap Fantasy gift pack.
Woo Network
BAB token holders will be able to take part in a lottery of 5,000 xWOO. Users can maximize their chances of winning by trying different features of WOOFi to earn additional tickets up to a maximum of 4 tries.
Dracoo World
BAB holders get 1 extra Fighting Ticket daily to enter Dracoo World Cup Prediction in game.
TopGoal
Each BAB token holder can get 3 All Star trial cards to play TopManager S1 and earn lucrative token rewards for free, including their metaverse utility token $TMT and their DAO token $GOAL.
OpenOcean
Users who hold their own BAB (Binance account bound token) or Glory Pass are entitled to a one-time free lottery ticket (no prediction needed) just connect your wallet to OpenOcean and claim your ticket. Holders who make a swap receive 1x EXTRA ticket in addition to their prediction from the trade.
Conclusion
Soul-bound tokens are a relatively new concept in the world of cryptocurrency, but they have the potential to significantly increase the security and accountability of digital assets. By linking tokens to a specific account or wallet address, it becomes much more difficult for someone to steal or misuse the tokens without the account owner's permission. Binance is the only cryptocurrency exchange so far that has implemented soul-bound tokens. While the concept is still relatively new, it will be interesting to see how soul-bound tokens are used in the future and whether they become more widespread in the cryptocurrency industry.