The Capital
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The Capital

Soulbound Tokens: The Framework of a Decentralized Society

What is our true identity, and by that, I mean the true, unedited us, as opposed to the person we may portray ourselves to be? Whether a person is religious or not, they tend to refer to this reality as their “soul,” their fundamental being, and the collection of inherent truths that distinguish them and even make them valuable.

In the near future, we may be able to collect and store elements of our identity in the form of non-transferable, non-financial NFTs, or “soulbound tokens” (SBTs). SBTs were introduced only a few months ago when Vitalik Buterin presented them.

The idea is brilliant, and it has the potential to address many of today’s problems. We’ve had numerous discussions in recent months about whether people should be allowed to have multiple online identities. SBTs have a distinct approach to answering that question.

When people apply for jobs, prospective employers have a difficult time distinguishing between fact and fiction. SBTs have the potential to address this issue.

Our Decentralized Society’s Next Generation

Until now, the majority of Web3’s focus has been on finance-related applications and asset accumulation and transfer, including non-fungible tokens (NFTs). Because they are not permanently associated with an owner, these financial NFTs can be sold or given away, just like a $20 bill with a unique serial number can move from one person’s wallet to another’s or to the till at the local convenience store.

SBTs are a completely new asset class for NFT technology. SBTs are NFTs that, once deposited, CANNOT be transferred from one person’s blockchain-based Soul to the Soul of another person or enterprise. SBTs can be bestowed by any entity that is qualified to do so.

In contrast to fictional books in which people sell their souls to the devil, this technology makes it impossible to give or sell your soul, and the same is true for blockchain Souls that hold valuable SBT credentials.

To be sure, SBTs will not always be used to document a person’s emotional side, such as their ability to love. They will document a person’s objective characteristics in order to facilitate social and professional relationships in a trusting and efficient environment.

What’s Going on in Your Soul?

These Souls will evolve to possess SBTs, which will record every verifiable, official truth about a person. They will accept SBTs from the soul of another entity, usually an institution that is authorized to bestow that token on a recipient. Yes, institutions will have souls in the future!

Any other person will be able to see the Soul, but not edit or capture it. Buterin and his colleagues describe the Soul as fundamentally open to the public, which appears reasonable up to a point. They acknowledge, however, that as the system evolves to capture a wider range of sensitive topical SBTs, it will require programmable, permission-based access protocols in specific areas.

SBTs are earned for educational achievements, memberships, professional accomplishments, and personal statuses such as parenthood or other relationships. Marriage will involve an exchange of vows… and SBTs, both between the two parties and, most likely, from the institution that is sanctioning the relationship.

SBTs will also document statuses and experiences, such as health histories, military service, and travel histories. They will record personal vital information such as health history, relationship status, and personal identity.

It is possible, if not likely, that SBTs will be revocable by the issuer in the future. If a person leaves an organization, divorces, or loses a medical license, the issuer will be able to recapture the corresponding SBT, effectively leaving a gap in the Soul.

SBT information will be compartmentalized. This will be accomplished through the use of multiple Souls (for example, a Soul for academic achievement) or by groupings of SBTs consolidated into various topical NFTs in a single Soul.

After all, if you’re applying for a job, you’ll want to limit access to the portion of your Soul that confirms employment history, education, publications, and patents, for example, all conveniently gathered into a single NFT or sub-Soul.

Keeping Your Soul Safe

Blockchain Souls have been described in such a way that it appears they would be forced to accept an unsolicited SBT. Buterin and his colleagues, on the other hand, indicate that the system will eventually include a feature that allows a user to hide or bury an unwanted or unsolicited SBT, keeping it hidden from public view.

Given the potential for abuse, let alone retaliation and character assassination, it seems reasonable that the system will eventually include a process for granting and receiving SBTs via mutually agreed upon transactions.

However, if the system is to have any fundamental level of credibility, Souls should be required to accept certain types of SBTs. Some argue that receiving, maintaining, and making available SBTs related to things like job terminations and police records, for example, should not be optional, lest a person presents a sanitized version of their Soul.

Skeptics of SBT compare this scenario to China’s social credit system, a state-sponsored extension of financial credit ratings that includes information on social behavior in order to calculate an individual’s overall “trustworthiness” rating.

Naturally, we’ll need to strike the right balance between privacy and accountability in the SBT blockchain Soul system. The world and our future world owe these visionaries enormous gratitude and respect for presenting this concept and initiating a public debate for us to digest and respond to. Without a doubt, the concept of the Soul Bound Token/Soul system will be refined and hotly debated in the coming months.

Disclaimer: The author’s ideas and comments are solely for educational and informational purposes. They are not intended to be financial, investment, or other advice.

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Abiodun Ajayi

Abiodun Ajayi

Abiodun Ajayi has more than 6 years of experience in Security and IT architecture. He consults and helps form strategies, perform project feasibility studies.