What Are Soulbound Tokens?

It’s said that the human soul weighs 21 grams. This proverbial understanding of the weight lost at time of death speaks to humanity’s long-standing grapple with mind-body dualism. Can you quantify what makes you you? And if it’s quantifiable, then you can tokenize it.

Cryptocurrencies are access-control tokens. At first, they just denoted what you were owed by the ledger. With the development of smart contracts and programmable logic, they became keys to unlock on-chain functions. With NFTs, this concept was distilled down in an access-control token that was one of a kind, and could be programmed with one of a kind utility.

Now, a new concept has emerged: Soulbound Tokens, or SBTs. Coined by Vitalik Buterin (with a nod to the ‘game that started Ethereum’, World of Warcraft) in a paper with Glen Weyl and Puja Ohlhaver, SBTs are one-of-a-kind NFTs that a programmatically non-transferable between wallet address. Once an SBT is issued to a wallet address, it is linked permanently and unalterably to it. A permanent record on a specific wallet address that, unlike NFTs, cannot be sent to other users.

SBTs would be a powerful way for authorities, institutions, professional bodies and governments to issue documentation and store data about individuals on their decentralised Web3 wallet.

A user with a soul bound token could prove they had, say, attended Harvard (looking at you Mike Ross) without having to trust how that data is stored or who knows about it. It would allow creditors to see payment records and credit history directly. Medical records could be stored safely and accessed appropriately with no problematic issues of custody, inefficiency bookkeeping, and patient confidentiality requirements.

There’s a fun side too. SBTs could be given out at parties and festivals as a permanent record of ‘I was there in 2023’ — but with added benefits like that same wallet address used a sign-in mechanism for a 2023 reunion 10 years later.

In a world with global crypto adoption, SBTs could be powerful tools to solve all kinds of access control problems in a way that puts private data in the hands of the individual. You could collect welfare, validate tax residency, and pass passport control through signing a transaction with your crypto wallet which contains an SBT issued by a national government. Blockchain’s immutability, transparency and security means that a single wallet address could be your signature to every aspect of daily admin, and SBTs are a core solution to that utopia.

But there is dystopia, too. If governments or companies could issue SBTs that permanently confer a ‘status’ on a wallet address, that person could be permanently blacklisted, or otherwise excluded, from a society or segment of it. There are fears already that certain nations’ CBDC account system, with the use of SBTs, could see a more totalised roll out of a social credit system. One that many countries may see fit to adopt.

Nevertheless, SBTs are a powerful, new on-chain tech opportunity, if one that needs more substantial rollout and adoption of crypto and smart contracts as a whole in everyday life to be an influential one. There’s nothing Ethereum-specific about SBTs, and Cosmos and by extension Onomy, will be able to issue them. If their conceived uses play out anything as expected, you’ll have a little bit of your soul on-chain too.