What Exactly Are SBTs ?
Are SBTs replacing NFTs In The Crypto-Space?
What If I told you that your whole identity could soon live in
SoulBound Tokens on web3?
Yes, I believe SBTs are going to be the next thing after the NFT hype and their use cases seem interesting.
Earlier last month, Vitalik Buterin co-authored a paper outlining his vision for a “decentralized society” (DeSoc)
DeSoc—which is basically a co-determined sociality, where Souls and communities come together bottom-up, as emergent properties of each other to co-create plural network goods, including plural intelligencies, at a range of social scales.
The key primitive feature is accounts, or wallets, that hold publicly visible, non-transferable (but possibly revocable-by-the-issuer) tokens. These accounts are referred to as “Souls” and tokens held by these accounts as “Soulbound Tokens” (SBTs).
Soulbound tokens (SBTs) are non-transferable, publicly-verifiable digital tokens. They are a new token standard similar to ERC-20 and ERC-721. They are immutable and are tied to a wallet and digital identity.
Soulbound Tokens are a type of NFTs (let's say) that act like real-life achievement badges akin to what you'd get in a video game upon completing a certain task or clearing a milestone.
SBTs resemble POAPs. POAPs are unique proof of attendance NFTs verified on the xDai sidechain.
POAP (pronounced poh-ap) is an acronym for Proof of Attendance Protocol. These NFT badges are given out to prove attendance of an event, whether it took place virtually or in the real world.
For example, a person might have a Soul that stores SBTs representing educational credentials, employment history, or hashes of their writings or works of art.
In their simplest form, these SBTs can be “self-certifed,” similar to how we share information about ourselves in our CVs.
The true power of this mechanism emerges when SBTs held by one Soul can be issued—or attested—by other Souls, who are counterparties to these relationships.
These counterparty Souls could be individuals, companies, or institutions. For example, the Ethereum Foundation could be a Soul that issues SBTs to Souls who attended a developer conference.
While blockchain inclusion enables us to trace the time a particular work was made, SBTs would enable us to trace the social provenance, giving us rich social context to the Soul that issued the work.
SBTs offer useful security properties: non-transferability prevents transferring or hiding outstanding loans, while a rich ecosystem of SBTs ensures that borrowers who try to escape their loans (perhaps by spinning up a fresh Soul) will lack SBTs to meaningfully stake their reputation.
Some of these communities—like employers, clubs, colleges, or churches—might be more off-chain in nature, while others—like participation in protocol governance or a DAO—might be more on-chain.
In a community recovery model, recovering a Soul’s private keys would require a member from a qualified majority of a (random subset of) Soul’s communities to consent
By embedding security in sociality, a Soul can always regenerate its keys through community recovery, which deters Soul theft (or sale): because a Seller would need to prove to sell the recovery relationships, any attempt to sell a Soul lacks credibility.
🌟 The Timeline
Unlike a non-fungible token (NFT), which is a collectable digital asset that can be traded or sold, SBTs are designed to be untradable
According to E. Glen Weyl, one of the co-authors of the paper, SBTs could be expected to launch by late 2022.
SBTs could hit the crypto realm by the end of 2022 but Vatalik and the co-authors said they hope for a decentralized society in 2024 if SBTs are to be taken seriously during the next crypto upcycle.
🌟 The Paper
You could get to read more about the paper here.
Once again, hope you learned something today from my little closet.
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