In May 2022, Ethereum Cofounder Vitalik Buterin, lawyer Puja Ohlhaver, and E. Glen Weyl an economist and Social technologist proposed a concept; Soul Bound Tokens (SBTs). The whitepaper (found here) envisages a fully decentralized society(Desoc) that thrives on Soul Bound Tokens (SBTs).
What are Soul Bound Tokens?
Just as we get certificates from schools, medals for completing or participating in some kind of activity, special IDs for belonging to a special group etc. What if we could get all of these and more on¬chain? Maybe Certificates that prove you completed a course, a badge or medal for completing a task or reaching a certain milestone all of these put on the public immutable ledger (the blockchain)? This is the concept of Soul Bound Tokens(SBTs).
SBTs are just a type of NFT, the only difference; It is bound to its owner’s “soul” i.e it cannot be sold or transferred from one “soul” (wallet) to another. SBTs are basically an on¬chain representation of your reputation and accomplishments that make up your identity.
You want more knowledge on how SBTs could impact web3? LFG…
How do Soul Bound Tokens work?
You will no longer need to submit Resumes for jobs, just sending your “soul” (wallet address) to your potential employer and they can verify on the blockchain what qualifications you have. SBTs are like your “Resume on the blockchain”
With Soul Bound Tokens your potential employer can check your history on¬chain.
It is easy to make claims about what credentials you have or about which Ivy league university you graduated from. But with SBTs, the “soul” (wallet) of the university you claim to have graduated from will have to issue an SBT to your “soul” (wallet) to make that claim true. This makes it near impossible to claim false credentials.
Raise a glass to all those who claim false credentials in web 3
3 Ways Soul Bound Tokens will impact web 3
wake up! We’ve gotten to the most important part.
1. Creation of a Decentralised society (DeSoc)
This is the vision behind the concept of SBTs, a truly decentralized society where transactions are carried out on the basis of trust. SBTs will be the building blocks with which web3 networks/societies can be built.
2. True/verifiable digital Identity
With your whole identity on the blockchain, it makes it easy to verify and “impossible” to fake a digital identity. This is what web3 needs as we’ve fallen victim to false creators and CEOs over and again.
3. Decentralized Governance
The system of governance in web3 especially in Decentralized Autonomous Organisations(DAOs) at the moment gives higher chances of influencing decisions to people with a higher number of tokens. This is very vulnerable to sybil attacks. But with a trust based system of governance that will come alongside SBTs we will witness a truly decentralized governance which gives a chance to make a decision to anyone trusted by the community.
Some worries about Soul Bound Tokens
Even with the myriad of positive impacts SBTs will bring to web3, there are still some concerns. One of the most prominent is and has been; What happens if my “soul” is compromised?
Have no worries, this has been addressed in the whitepaper where the concept of SBTs was first proposed. The paper describes a community¬wide adoption of the social recovery model to prevent SBT theft. With social recovery, one can appoint a set of individuals or institutions as guardians, who have the ability to access and change the private keys of their wallets if it gets compromised.
Soul Bound Tokens will most likely be another buzzword in web3, greater than that, it will have a lot of positive impact on web3 and its mass adoption.The subtle drawbacks haven’t been overlooked too, different strategies to tackle the drawbacks that is and is to come with SBTs has been put in place and will be developed as we go on.