Soul bound tokens -A Gateway to Decentralised Society
We have reached a point in web3 where social identity could be the next step which will help us resolve the pre-existing issues like Sybil attacks, higher collateral submission, and fake decentralisation and a step further to a decentralised society — ‘DeSoc’ but before we see how these soul bound tokens can enhance web3 ecosystem let us understand what exactly are they?
What are Soul-bound Tokens?
The word Soul is used in the paper co-authored by Vitalik where they explained what soul means. The soul is referred to as an account or a wallet that holds publicly visible, non-transferable but could be revocable by the issuer — a Soul Bound Token.
A soul can hold any number of soul-bound tokens which could consist of the events they attend, their university degree, or even their birth certificate but things will get more interesting when other Souls can verify them and have a relationship with those tokens, like your university who is a Soul can issue a degree to another soul and degree could be a soul bound token so it cannot be transferred to other people but it can be attested or revoked by your university.
Where is this idea of Soul bound token arise?
The idea of Soul bound comes from where most amazing ideas come from — a video game Vitalik mentioned about it in his blog
He liked the idea of soul-bound artifacts present in games where you have to earn your merit and the merit you earn will belong to you and cannot be transferred, acquire, or stealth from you.
When compared with the NFTs which are often shown off as having a certain status in the community based on their utility or uniqueness and making them a kind of merit you want to earn for being a part of the community.
Where we can use them?
Soul-bound Tokens are the game changer in establishing social identity. Having a cryptographic proven identity can solve a lot of identity theft, and bot penetration and help us to include proven diversity.
There are a few but not limited use cases where we can use SBTs:
Origin of Art :
Any artist could create their own SBT NFTs with their art which will guarantee that the particular art belongs to the artist.
Another important use case could be in blockchain we can trace when any art is created and with SBT we can also know who has created that art. The issue of deep fake generated videos and malicious bot which generates spam could be easily traced and handled. With proof of Personhood, we can establish who is the owner — a bot or an actual human.
Lending & Collateral
With the constant fall of CeFi, it is very clear that Decentralised Finance is the key to moving forward but the major issue with DeFi is you can not get a loan as easily as in the traditional or CeFi as there is no way to do KYC (know your customer) but with SBTs which can act as a KYC even without disclosing important personal information like your address or even your name. Your reputation will be based on peer reputation not where you were born or what race you belong to.
Proof of belongings
Any event you attain in web3 tells something about you and helps to create a reputation which can come in very handy when you want to develop trust among your peers. We are in the process of making history for a new future and with SBT we can prove what part we played.
If POAP( Proof of Attendance Protocol) is an SBT then it can help you to build an identity and reputation.
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DAOs and their membership
Using SBT we can avoid a Sybil attack where the system does look decentralised and democratic from the outside but one party holds 51% of the vote and hence controls the activity and funds of DAOs.
The social identity of DAO members helps to understand and manage the leadership and administrative role by understanding what members of DAO are more associated with.
A Check for fake decentralisation
In the current scenario where most of the company directors are good friends and do business based on their relationship, SBT would help us to understand how decentralised any organization in Web3 is. Whether all the shareholders have some common affiliation may personal or similar education institute. We can check if they are decentralized and global as they are claiming.
How SBTs can build a Decentralised Society?
Right now we don’t have a connection between our physical world relationship and our virtual world in Web3. We need to translate the physical world social relationships to our virtual world.
SBTs can help to create trust and cooperation among individuals and communities and can help us to correct the deep-rooted biases as a society we face which could be racism, political polarity, or gender.
The main definition of DeSoc as mentioned in the paper is a co-determined sociality, where Souls and Communities convene bottom-up, as emergent properties of each other to produce plural network goods across different scales.
This is a very important aspect when we think about a decentralised society. Social Communities are most important in economic growth but easily can be controlled by a private organisation like social media, news media ,and the government. They control the main rights to the basic amenities like how to use them, destroy or control them, and share the profit. This creates an aristocratic system which is also known as a 1% population controlling 99% of the population but instead of top to a down approach which our society works with DeSoc, we can create a peer-to-peer attestation.
In Web2 Social media members are treated as objects and polarised and misinformed people whereas in Web3 Social media Members will be the soul which will empower the network
But what will happen if you lose your Soul?
The first question that could come to anybody’s mind is what will happen if my account aka my soul can be compromised since all the soul-bound tokens are connected with my soul and are non transferrable so will I lose everything?
There are multiple ways to protect your soul:
- Multsig Wallet — For any transaction, you need multiple signatures from another account thus making it very difficult to acquire your soul.
- Social Recovery Wallet — It is like a normal wallet where you sign a transaction but in case of loss of wallet you have guardians who can trigger the special transaction to change the public key to sign in from another wallet contract.
What is the limitation of Soul Bound Tokens?
There could be limitations to Soul Bound tokens as well since they could provide a social substrate there will be corruption and greed like people offering SBTs to create social credibility in exchange for power or money.
Another important aspect is Soul being public it will provide access to all the information about it and this could lead to limiting the selectivity of information. A soul may not want to share all the information related to social identity.
Conclusion
Soul Bound tokens are a good principle we can work on to create a decentralised society but it is a very young concept we need more minds, builders, and testers to work on it and improve it without a doubt, it will be an important catalyst to develop a decentralised world.
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