Jahdiel Chidi
7 min readDec 12, 2022


image credit: real vision

The soulbound token is a concept proposed by vitalik Butterin in his blog post earlier this year, in January 2022 precisely. And then jointly proposed a paper later in May 2022 with lawyer Puja Ohlhaver, and E. Glen Weyl, an economist, and social technologist.
Entitled “Decentralized Society: Finding Web3’s Soul,” lays 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 web3 life.
soulbound token according to Vitalik is a concept of soulbound items in video gaming that gamers earn after completing some very difficult task and they are rewarded with items that can’t be transferred or sold to another player. it’s originally from the video game “World of Warcraft,” where some items are soulbound.

WHAT ARE SOULBOUND TOKENS? Soulbound tokens (SBT) are non-transferable tokens or NFTs representing a person’s identity on the blockchain.
Soulboud tokens (SBTs) aims to turn the NFT concept into something beyond money and bragging rights, a token that is both one-of-a-kind and non-transferable. While NFTs represent assets and property, an SBT represents a person or entity’s reputation/identity. And unlike an NFT, SBTs hold zero monetary value and cannot be traded out from the holders wallet know as soul.

The details of a soulbound token could include medical records, work history, and any type of information that makes up a person or entity. The wallets that hold or issue these records are called “Souls.”
People could have multiple wallets (or Souls) representing different parts of their lives. For example, someone could have a “Medical Soul” for their health records, a “Credentials Soul” for their work history, these souls and SBTs would allow people to build a verifiable, digital Web3 identity based on their past actions and experiences, transactions carried out on-chain.

Souls can represent an entity that allocates SBTs. For example, companies can be Souls, issuing SBTs to each employee. A school could issue SBTs as certificates to their students, A hospital could issue SBTs to their patients, A digital country club could issue SBTs to verify membership status. The list is endless.


There are a couple of potential use cases for SBTs and we a few of them below…

Everyone who has ever been to a hospital for any kind of treatment has a medical paperwork record filed at that particular center, and over time one could visit more than one health center for many reasons either, they were referred by their doctor or they moved cities or by emergency. But imagine your medical record held on a soulbound token and available on-chain? This would help to eliminate the slow process of re-filing paperwork and verify or ascertain your medical history whenever you visit a new health center, all that is needed is to access your medical record on SBT stored on the blockchain.

Imagine schools, higher learning institutions, companies/employers, and sporting institutions adopting the soulbound token concept and issuing SBTs-based certificates, merits/achievements. These SBTs would have all their academic and professional history/records. Making it easier for individuals to showcase their achievements, certificates and merits on-chain and verifiable.

Soulbound (SBT) tokens could be used to store identification data like passports, driving licenses, voter’s data and other recognized licenses available on-chain, making verification processes by various authorities authentic easier. Non-profit organizations (NGOs) could issue SBTs as membership cards. Soulbound tokens could be more efficient to streamline identification and verification processes in real time remarkably.

Proof of attendance protocol: this is a kind of SBT issued to an individual for having attended certain events, either physically, or online. And this could be a collection of SBTs by the individual showcasing verifiable records of notable events/life experiences.


One of the many challenges affecting the web3 industry is trusting a user’s reputation in a system (blockchain) that is designed to be trustless, take for instance the traditional banking system where credit scores are considered before lending out money to a borrower.
Similarly, SBTs could be used to track a Defi user’s borrowing history and other on-chain activities of the user before they can access or participate in borrowing contracts. Soulbound tokens could also work as alternative voting models for decentralized autonomous organizations (DAOs). Replacing the current voting model which is based on how many tokens a member holds, thus determining their voting power.
Governance tokens give holders the right to vote on issues that govern the development and operations of a blockchain DAO project. It’s a method for projects to distribute decision-making power to their community members.

This model is vulnerable to attack by an individual or group of whales who hold more tokens and could decide to swing the voting process in their favor.
This is where SBTs become a better alternative because of their nature. DAOs could issue their community members one SBT each which gives every member equal voting rights. This model would delegate voting power to the most dedicated user(s) with a proven strong reputation. Essentially, Governance tokens will continue to evolve to fix problems as they emerge.


These are some of the examples of SBTs to expect in the nearest future:

✅Proof of NFT provenance

✅DAO voting

✅Lending in DeFi

✅Proof of attendance

✅Digital employment records

✅Digital proof of certifications

✅Digital medical history

✅Airdrops bound to Souls

As you already know, SBTs are new and research is still ongoing to explore this new technology. Glen Weyl one of the co-authors of the soulbound token whitepaper, believes early use cases would be live by Q4 2022.
However, on the 8th of September 2022 #binance launched its own SBT protocol called Binance Account Bound (BAB). The BAB token has no monetary value and is a non-transferable token.

The BAB token is the first on the BNB chain and it aims to tackle identity verification issues in web3, the BAB token could also be used to airdrop/souldrops nfts by other protocols built on bnb chain, facilitate DAO governance voting, prevent bot activities also serve as a digital verification tool for Binance users who have completed their KYC process.


There are several benefits that soulbound tokens could bring to the web3 lets look at a few of them below.

One of the major goals of the SBT proposal is to increase trust in the web3 space providing the means to verify users’ reputations. This could lower the risk of crypto scams and manipulation by making it harder for people to lie about their status and achievements.

The web3 space currently seems to be money-centric, with little attention towards social development. With SBTs individuals can build, maintain and showcase digital identity through a collection of SBTs in their souls (wallet) resolving issues around trust, identity theft making Defi protocols become more efficient.

When looking to secure a bank loan, the bank will consider the individual’s credit history using the regular bank credit score process.
but with SBTs it becomes easier and faster to track a user’s credit history because it will be on-chain and linked to each user’s on-chain-activities.

Soulbound tokens (SBTs) could also help potential customers access a more favorable lending rate. SBTs information on chain would be highly useful for decentralized finance protocols and will facilitate the space’s mainstream adoption overtime.

Soulbound token technology could also help drive the move towards a decentralized society (DeSoc) by reducing the dependence on centralized web2 entities, like social media, for social interaction/connection. For example, rather than relying on Twitter, Facebook, etc, an online community would be able to connect through a blockchain-based decentralized application that verifies community membership via an individual’s SBT holdings.


Your soul in this context is the wallet containing your SBT. And if any reason you lose your Soul, your tokens would be recovered through social recovery. this process relies on your continuous good relations with your Guardians. you could appoint these “Guardians” to your SBTs, who can change the wallet keys with the approval of the majority. This “Guardians” could be trusted individuals, organizations or others within the system.

Another method that could be used for SBT recovery is community recovery. This process empowers the issuers of soulbound token certificates to change the keys of your “SBT Certificate” after you have given your approval.

NOTE: This methods have not been experimented in to real-world scenario.


With the so many promising solutions SBTs could bring to the web3 world in the future there’s a worry that it could introduce new levels of discrimination, control, monitoring. This could happen when SBTs are linked to individuals off-chain identity/record, especially when these individuals perhaps belong to certain interest groups, social movements, religious groups or a political class. with the oppositions having access to these data it could become weapon of surveillance and control and could eventually be harnessed for such purposes.

Unifying off-chain data with on-chain data would be a great technological development but these would be difficult and could take longer than predicted to achieve its full potential. Moreover, there has to be probably a general consensus for a global accepted SBT standard.