Ethereum creator Vitalik Buterin recently proposed a new kind of token standard that will help users gain insights into others’ real-world activities, accomplishments, likes and dislikes – something like a glimpse into their soul.
Buterin’s soulbound tokens (SBTs) are non-transferrable NFTs held by unique crypto wallets called Souls. In the paper Buterin co-authored to introduce the concept, he described multiple ways SBTs could be used – as university degrees, education credentials, and as web3 credit scores.
Instead of a web3 hiring manager calling up your alma mater or checking LinkedIn, he could check your on-chain resume for a transaction showing the university’s Soul transferring you an SBT. As Buterin writes, “‘Souls can encode the trust networks of the real economy to establish provenance and reputation.”
SBTs have the ability to decentralize power away from major institutions and companies and towards the users – instead of a private database owning your credentials, you would own the keys to your credentials.
“Instead of having to trust educational institutions, we can just look directly at what was learned. It’s all transparent,” tweeted Tim Connors, founder of web3 education platform 101.
On-chain credentials are already being used by companies like 101 and RabbitHole. Ben Yu told The Defiant that his team at Curious Addys will soon be using SBTs for their web3 Q&A platform Curious.xyz to help users build on-chain reputations for answering questions.
Paper co-author Glen Weyl told The Defiant he believes that SBTs could be in early use by the end of 2022 and that he suspects the “2024 up cycle will focus on them”.
But judging from early community feedback, there are still some wrinkles to iron out in the Soulbound Tokens idea for it to really take off.
Losing Keys
First is every crypto-native’s nightmare: losing access to your wallet. It’s bad enough when the address holds digital assets, but what happens if you lose access to your Soul – is your SBT university degree gone forever?
The paper’s co-authors proposed an idea called community wallet recovery, meaning that recovering a Soul’s private keys would require members from the Soul’s communities to consent.
Still, this solution would only work for those deeply ingrained and involved in crypto projects and would not be very useful for newbies just getting started who don’t have a network that can vouch for them.
Spam
Also, what happens if someone sends your Soul unwanted SBTs? Are you stuck with them forever?
In their paper, the team proposed an idea for hiding SBTs from public viewing, and Weyl told The Defiant that “there should be” a way to hide or burn NFTs without using gas.