SoulBased Tokens (SBTs): A Brief Introduction

SoulBased Tokens, or SBTs, represent a novel concept in the cryptocurrency space. They are non-transferable, non-fungible tokens that are unique and publicly verifiable, emphasizing earned value and are not tradable.

Inspiration from Gaming: The Warcraft Connection

Originating from multiplayer games like World of Warcraft, SBTs echo the concept of in-game items earned through challenging tasks. In 2022, Ethereum co-founder Vitalik Buterin, along with Glen Weyl and Puj Ohlhaver introduced a whitepaper discussing the adoption and benefits of SBTs in web3 ecosystem.

Diversity in Soul Representation

SBTs deviate from a 1:1 ratio, because "Souls" or wallets connected to these tokens can signify individuals, organizations, or communities. An individual may possess various SBTs across different Souls, symbolizing distinct facets of life.

Advantages of SBTs in Web3 Ecosystem

1. Enhanced Security: SBTs can act as safeguards for web3 innovations like DAOs. For instance they can help prevent malicious actors from conducting schemes like Sybil attacks on DAOs.

2. Authenticity Verification: SBTs validate digital credentials, including certificates, health records, and academic achievements, ensuring authenticity in a non-transferable and non-tradable format.

3. Trust Building: SBTs will contribute to building trust in the web3 ecosystem, enabling applications such as decentralized finance (DeFi) protocols to rely on reputational tokens for uncollateralized loans.

Use-Cases of SoulBased Tokens

SBTs find applications in various domains, including NFT arts, DAO governance, educational institutions, community memberships, digital identities, and digital CVs. They serve as a means to verify, secure, and reward individuals, communities, and organizations in the decentralized web.

BABT: Binance Account Bound Tokens

While SBT projects are emerging, Binance has introduced Binance Account Bound Tokens (BABTs) on the BNB Smart Chain. BABTs serve as credentials proving a user's completion of Know Your Customer (KYC) requirements, offering a tangible example of SBTs in action.

Challenges and Future Outlook

Despite their promises, SBTs face challenges, such as the potential for permanent loss if a user loses access to their wallet. However, as blockchain technology continues to evolve and redefine data storage and verification, SBTs are poised to revolutionize how we authenticate online identities and credentials, especially in the web3 space.

Conclusion: The Promising Trajectory of SBTs

While SBTs are currently present with challenges, their potential to reshape trust, security, and authenticity in the web3 landscape is undeniable. With collaborative efforts from governments, organizations, educators, and influential figures, the development and adoption of SBTs could mark a significant milestone in blockchain technology.