What Is Soulbound?

[TL;DR]

1.Vitalik Buterin introduced a non-transferable token in his paper "Decentralized Society: Finding Web3’s Soul", which can be used to establish a set of exclusive social credit systems of Web3.

2.Treat SBT as a non-transferable personal NFT.

3.The lack of identity in Web3 has led to many problems, including the heavy reliance on Web2 infrastructure and the frequent occurrence of cryptocurrency crimes.

4.SBT has powerful functions, which can be used to reduce NFT forgery, enable credit lending, and help DAO mitigate witch attacks.
Ultimately, the SBT concept can make your passport, medical data, or diploma SBT.


What Is Soulbound?

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In the game "World of Warcraft'', many top-level equipment or game props have the setting of ''Soulbound”. A simple understanding is that after the player picks them up, these items will be bound to the game avatars and cannot be circulated in the trading market.

Compared with those weapons and equipment forged by players and tradable, the properties of Soulbound equipment of the same level are better and more difficult to obtain.


What are Soulbound Tokens?

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Vitalik Buterin and several experts jointly published a paper entitled "Decentralized Society: Finding Web3’s Soul", which introduced how the non-transferable "Soulbound" token (SBT) can represent qualifications, credentials and credibility in the future. The establishment of SBT will create a richer and diverse ecosystem for a decentralized society. These tokens will be stored in people's "soul" and use specific mechanisms to build a trust network like the real economy.

Soulbound token (SBT) refers to a token that is bound to another non-fungible token (NFT, such as an EIP-721 token) at the time of minting. SBT cannot be transferred after minting, but can be viewed publicly. SBT can represent your education certificate, birth certificate and national identity.

SBT can also be affiliation, commitment and membership. It is very similar to your resume (CV) and can be used as proof that you work or have cooperated with the organization or participated in meetings.

In short, SBTs are non-fungible tokens (NFTs) that cannot be sent to other users, so they are named "Soulbound". All SBTs are stored in a wallet called Soul.


What Is EIP-5114

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The concept of Soulbound NFT (SBT) proposed by Vitalik can be understood through the token standard draft EIP 5114.

EIP-5114 is the current standard of Soulbound token (note that this EIP is still in the draft stage, so there may be some changes in the later stage. In addition, Tim Daubenschtz and others have also written a similar EIP-4973 token standard, so there is still great uncertainty about which standard will eventually be widely accepted by the community).

Basic Principle of EIP-5114
1. Invariance
By requiring the token to be permanently immovable, we ensure that the Soulbound token set bound to a single NFT cannot be separated and merged, while allowing users to actively cache results.

2. Need URI content addressable
The Soulbound token is a permanent badge / indicator attached to an avatar, which means that not only the user cannot transfer the ownership, but also the minter himself/herself cannot withdraw, transfer or change the ownership. This includes converting or deleting any remote content as a means of censoring or manipulating specific users.

3. TokenUri data format
The data formats oriented toward "collectionUri ()" and "tokenUri (uint256)" are intentionally excluded from this standard to support separate standards that can be iterated in the future. Regardless of the details of the data format, invariance constraints are the only thing defined to ensure that the spirit of this token is maintained.


Existing Use Cases of Soulbound

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In fact, SBT is very similar to the credit reporting system we have been using in the real world financial system, but SBT can provide a more comprehensive and multi-dimensional social scoring standard. Those accounts that hold SBT will be "souls". Let's take a closer look at the existing use cases of SBT:

1. Artwork
SBT aims to help NFT creators and artists build a reputation in the target community and make the reputation of artists verifiable. For example, artists can release NFT from their "souls" (or accounts). The more SBT an artist's account carries, the easier it is for collectors to identify the owner of this account as the artist. Because SBT is a token obtained through various life experiences, the more SBTs in an account, the more they can prove the authenticity of this person. Therefore, as mentioned above, SBT can be used as a social scoring system to verify reputation and credibility.

2. Credit Scoring System
Presently, the Web3 ecosystem cannot support credit card business and loans without collaterals, because it lacks a mechanism that can be used to measure the reputation and payment ability of borrowers. So, how can SBT fill such an obligation gap? SBT can endorse a person's credit status and permanently record it. In this way, using the "soul" account can accumulate reputation, which is used as the standard for granting credit. Specifically, these tokens can endorse education certificates, work experience, contracts and other documents supporting personal reputation.

3. Mitigate Witch Attacks
Decentralized autonomous organizations (DAOs) have proposed a bottom-up, democratic and transparent way for future company management and operation. DAO brings like-minded people together through common goals, and uses smart contracts to vote, so as to promote community development in a bottom-up manner. However, DAO is very vulnerable to witches. The witch attack means that in a social organization, a single user can own multiple wallets and hoard tokens to achieve 51% of the voting rights, and then manipulate decisions.

SBT can reduce the risk of a witch attack by distinguishing between real users and potential robots. How to do that? SBT will use multi-dimensional information, such as education certificates, licenses or certificates, to form a comprehensive image of Web3 users. In this case, if an account lacks diversified real resumes, we can immediately identify them as robots.


Conclusion

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As the core concept of decentralized society proposed by Vitalik and others, Soulbound token is still in a very early stage of development; On the other hand, it may be very valuable for users to find ways to make their "soul" intriguing.

Although SBT, the Soulbound token, is still a little far from being as mature as DeFi, the crypto industry has never lacked "pioneers". Perhaps SBT, like NFT and GameFi, will also hide certain opportunities behind "strangeness". SBT's exploration in the blockchain world and how to have social identity credentials like the real world are also crucial for building a rich and colorful Web3 world in the future.



Author: Byron B., Gate.io Researcher Translator: Joy Z.
This article represents only the researcher's views and does not constitute any investment suggestions.
Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.



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