So I’ve heard about SBTs (SoulBound Tokens) and the future of the Ethereum and all, and now it’s really time to put my nose into this hot topic. I am gonna break it down into the simplest version possible.
What really are SoulBound Tokens (SBTs)?
Vitalik Buterin, who created Ethereum, says that Soulbound tokens (SBTs) are “the future” of the cryptocurrency. In short, SBTs are NFTs that can’t be moved once they’ve been received. You will keep it in a Soul wallet forever.
Simply put, you can’t give them to anyone else. Some people might not understand why you would use a non-transferable NFT. People can’t share SoulBound Tokens; maybe that’s why people are so into this. But why, though?
Why are people so into SoulBound Tokens (SBTs)? What are its uses?
Unlike Non-Fungible Tokens (NFTs), SoulBound Tokens (SBTs) are non-tradeable. So if you look at it from a straight view, it’s not profitable, but its use cases are extreme if you think about it.
Imagine you are a University Student who’s about to get a degree. University could give you an SBT degree when you graduate. At the moment, if a university gives out a degree as a standard NFT, you can, in theory, sell it because of how the technology works. If it was a Soulbound token, on the other hand, you cant sell it or give it to someone else.
Using SBTs as tickets to an event is another great idea. Event organizers could be sure that a person really went to a conference or event if they had an SBT to prove it.
For Example, let’s say the Marvel Universe throws an Event and says only the attendees of that event will be able to come to an exclusive premiere of their new Movie.
(I know I’m Marvel Fan)
If Marvel gives NFTs to every attendee, then it will be hard to know who exactly attended the event cause NFTs are transferrable. On the other hand, if they give SoulBound Tokens (SBTs) to every attendee, it’ll be easy. In other words, The nature of SBTs will make it easier.
It does make sense, doesn’t it?
Souldrops would be the last Example. These are airdrops determined by how many SBTs and other tokens are in a Soul. For Example, a DAO that wants to bring together a community within a certain layer one protocol could soul drop to developers who hold 3 out of the last five conference attendance SBTs or other tokens that show attendance, like POAPs.
Some Honorable Mentions
It’s not clear yet, but the way SoulBound Tokens (SBTs) work, anything that ties with you in your whole life can turn into SBTs. Things like your personal id, blood type, achievement certificates, or even patent registrations can turn into SBTs.
That’s cool, but will it get hacked?
SoulBound Tokens will tie-up with you forever means its wallet will too. So This might raise a most crucial question, what if it gets hacked?
With every new technology, there come challenges and obstacles. For Multibillion-dollar tech NFT, it came as hacks and exploitations. We are still dealing with it, so there’s no denying that hackers won’t try to get their hands on SBTs too.
Value of SoulBound Tokens
One can define the value of NFT, but from the looks of it, the SBTs value can’t be determined (yet) cause SBTs will tangle with you forever. It’ll be incalculable if you take examples like degree certificates, personal IDs, etc. However, if you ask me, some can be calculable, such as event tickets in example 2 from above. But one thing is for sure It’ll be more valuable than NFTs.
Can Soulbound Tokens be taken back?
Also, the Ethereum paper that explained SBTs said that the tokens could be taken back by the person who issued them. If you lose a Soulbound token, it’s now clear that you might be able to get it back through community recovery. This means that the Soul is the social network’s “intersectional vote.”
To do this, a user chooses a group of “guardians” and gives them the power to change the keys to their soul wallet. Guardians could include people, organizations, or even other wallets. Sadly, this makes it more likely that people will fight with their guardians or that the guardians will die, etc.
When will SoulBound Tokens be available?
Vitalik Buterin has said that early users will be able to start using Soulbound tokens (SBTs) by the end of this year. Jason Levin (@iamjasonlevin), a Twitter user, talked to a co-author of a 37-page paper written to “predict the future of Ethereum.”
Vitalik and the team would call this a “decentralized society” if it happens in 2024, which is when they hope it will.