Are Soulbound tokens (SBTs) “the future”? In this NFT Evening article, we can find the reasons why.
What are Soulbound Tokens (SBTs)?
Quite simply, they are completely non-transferable. The reasons behind using a non-transferable NFT may confuse some people. The transferrable nature is a large portion of why people are so into them, however, there are many use cases.
Can you recover Soulbound Tokens?
Further, the Ethereum paper explaining SBTs said that the tokens may possibly be revocable by the issuer. In terms of losing a Soulbound token, it has been clarified that they may be recoverable through community recovery. This means the Soul is the “intersectional vote” of its social network.
To do this, a user curates a set of “guardians” and gives them the power to change the keys of their soul wallet. Guardians could be a mix of individuals, institutions or other wallets. Unfortunately, with this comes a risk of people falling out with their guardians or the guardians passing away, etc.
What are Soulbound Tokens For?
There are several use cases for Soulbound tokens on Ethereum. For example; imagine a University degree. A university could provide a graduate with their certificate as an SBT. Currently, if a university was to give out a degree as a standard NFT, the graduate would theoretically be able to sell it due to the nature of the technology. On the other hand, if it was a Soulbound token, they would be unable to sell it or transfer it.
Another great example is using SBTs as event tickets. Event organizers could make sure a person truly went to a conference or event as they would have an SBT to prove it.
A final example would be Souldrops. These are airdrops based on computations over SBTs and other tokens within a Soul. For example, a DAO that wants to convene a community within a particular layer 1 protocol could souldrop to developers who hold 3 out of the last 5 conference attendance SBTs, or other tokens showing attendance like POAPs.
When will SBTs be available?
Vitalik Buterin has predicted that Soulbound tokens (SBTs) will be available for early use by the end of this year. Twitter user, Jason Levin (@iamjasonlevin) interviewed a co-author of a 37-page paper written to “predict Ethereum’s future”.
If this goes ahead when they hope, in 2024, Vitalik and the team would call this a “decentralized society”.