Soulbound tokens, NFTs linked to… your soul

SBTs are non-replaceable tokens that are associated with a person and cannot be transferred. As a result, multiple uses and few concerns.

Think you’ve seen it all with non-fungible tokens (NFTs), which are unique and not interchangeable? You hadn’t thought of soulbound tokens (SBT) yet! SBTs are not only unique, but also non-transferable. In other words, they are associated with your person.

While the use cases may be abstract at first glance, they are numerous and can revolutionize anything related to a person’s characteristics. This aspect is as reassuring as it is for some to worry. A brief overview.

How to define soul-bound tokens (SBT)?

History and Origin of Soul-bound Tokens (SBT)

SBTs are the latest in the galaxy of tokens issued and held by blockchain technology. It was Ethereum (ETH) founder Vitalik Buterin, who first mentioned a mysterious project on his blog, Soulbound, in January 2022. For the record, he explains that the term Soulbound comes from the World of Warcraft game, Soulbound being the most powerful items in the game. Buterin wondered about making non-fungible tokens (NFT) soulbound.

Four months later, the founder of Ethereum joins forces with other partners to unveil the concept of soulbound tokens or SBT in a document. When translated literally, it means “soul-bound tokens”. This is how SBTs came into existence and while they are technically NFTs, they still have their own characteristics.

The characteristics of soulbound tokens (SBT)

To fully understand what an SBT is, it is necessary to make a comparison with classical NFTs. First, the NFT is associated with an object or property. The SBT corresponds to the characteristics of a person. Under this distinction, for example, a work of art may not be in the form of an SBT and passing an exam cannot be an NFT.

Next, both NFT and SBT are unique and non-functioning tokens. They are not interchangeable with other tokens of the same type. Both are identified and verified with a unique signature and kept in a tamper-resistant ledger using blockchain technology. However, the comparison ends there.

Unlike NFTs, SBTs cannot be traded. So when they are spent and sent to a wallet, they can no longer leave it. This is quite logical, as SBTs are associated with a person and not an object. However, a person has no monetary value, unlike an object.

Finally, if the SBTs are unique, their loss is not necessarily irreversible. For example, if you lose access to your wallet where your NFTs are located, you will never be able to access your NFTs again. But if you lose your private key to the wallet containing your SBTs, it is possible to create new SBTs.

Use cases for soulbound tokens (SBT)

Strengthening the truthfulness of information

Now that you have understood the main features of SBTs, what are the use cases? Again, it’s kind of abstract and you have to look at Vitalik Buterin’s project, Decentralized Society of DeSoc. According to Buterin, the DeSoc stands for perfect equality and democracy, where all individuals are on an equal footing. In this DeSoc everyone can prove their successes to others, show their projects, vote or even define what they really are.

To do this, Buterin envisioned the creation of Soul addresses to which the SBTs are sent. Let’s take a concrete example, that of the certification of diplomas. You are studying at university and have just obtained your master’s degree. To certify this achievement, the Soul address of the relevant university creates an SBT and sends it to your own Soul address. This allows you to prove your success to everyone.

Based on this example, the use cases related to the veracity of information are many, from real estate or marriage title deeds to a municipality’s birth certificate or the preservation of medical records. Each time, the institution’s or practice’s Soul Address issues an SBT to a person’s Soul Address.

While these features are interesting, it should nevertheless be specified that the SBT would currently only be available on this DeSoc sought by Buterin. Indeed, there are no other projects involving SBTs. For example, to return to the case of the loss of the private key of the wallet containing the SBT, the creation of an identical SBT would only be adopted by the majority of the community.

Privacy Concerns

Some readers may be shocked at first to understand that SBTs are very close to a person and can reveal some of their intimacy. This has been most criticized for this project, which is still in the imagination stage.

SBTs are intrusive by nature. They only exist to prove who you are, your successes, your health or even your marital status. And all of this could potentially be seen by everyone in the DeSoc. If some argue for absolute transparency, others believe that by George Orwell in 1984 we would be in the consummation of the surveillance society.

Aside from this debate, one might wonder what the real use of SBTs would be outside of DeSoc. Indeed, a “classic” NFT, of the ERC-721 standard, can fulfill the role of certification and authenticity. Likewise, NFTs can self-destruct once a code has been used or a person has voted.

We are only just at the rise of SBTs and the future will tell whether they will find a place outside the DeSoc on the one hand and whether they have a particular interest in distinguishing them from NFTs on the other hand because of their characteristics.

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