On 17 December 2021, Adidas organized a digital occasion to announce its metaverse launch. The sportswear model rewarded its followers with a POAP (proof of attendance protocol). Identical to the vast majority of NFTs, POAPs are ERC-721 tokens, and their objective is to reveal that the proprietor attended the associated occasion.
On the occasion web page of the Adidas metaverse launch, the corporate shares that the token proves its proprietor was there from the start. This isn’t precisely the case, nevertheless. As a result of POAP tokens are transferrable, you’ll be able to commerce them on a secondary market like OpenSea. Meaning the present proprietor of an “Adidas into the Metaverse” POAP didn’t essentially attend the talked about occasion.
To be able to show attendance, NFTs have to be non-transferable. That’s the place Soulbound tokens are available in.
One other brainchild of Vitalik Buterin
Soulbound tokens had been first launched in a blog post by Ethereum’s co-founder Vitalik Buterin in January 2022. In that put up, he talked about that he was impressed by World of Warcraft’s “soulbound objects,” that are highly effective sport objects that, as soon as acquired, can’t be despatched to different gamers. He emphasised that POAP tokens would work higher if represented as Soulbound NFTs.
Proof-of-attendance is simply one of many many conditions that may profit from this idea. You can even show you’re the precise holder of your talent certifications or different academic levels due to Soulbound tokens.
Vitalik expanded on the concept with E. Glen Weyl and Puja Ohlhaver in a paper titled Decentralized Society: Discovering Web3’s Soul, by which the authors clarify how Soulbounds tokens (SBTs) can be utilized to ascertain a decentralized id fame. Within the paper, it’s additionally talked about that SBTs can fulfill this operate by representing commitments, credentials, and affiliations. Consequently, they are often the constructing blocks of a decentralized society (DeSoc).
How can we use Soulbound tokens?
Whereas an everyday NFT represents a tradable asset, an SBT represents a token with no financial worth and is completely hooked up to an individual or an entity.
SBT remains to be principally a theoretical idea. However the foundational ideas permit us to think about potential purposes. Since they’re primarily designed as id fame tokens, we will consider use circumstances like
- academic credentials
- employment historical past
- medical information
- driver licenses
- crypto-specific circumstances based mostly on private fame, corresponding to taking DeFi loans or safety towards Sybil attacks.
Within the paper, the authors steered utilizing the time period Soul to characterize an account of a person, like a crypto pockets. Souls also can consult with the issuers of the SBTs. They are often related to any entity, like a college, an employer, or a hospital.
Individuals can have a number of Souls, every representing a selected a part of their lives. They will, for instance, have one Soul for skilled certificates and one other for health-related paperwork. A Soul can include a number of SBTs.
What are some Soulbound tokens with precise use circumstances?
Binance is launching the Binance Account Bound (BAB) token, which is basically an SBT. Its objective is proof of id. Each Binance consumer who completes the know-your-customer verification course of will be capable of mint the BAB token and take part in a number of tasks to earn rewards.
xHashtag is constructing #SoulSwag tokens for creating work-related credentials, like talent certifications that showcase one’s proficiency in a selected kind of activity. xHashtag is distributing #SoulSwag free of charge in partnerships with different tasks to let the customers document their accomplishments for finishing sure duties. One other use case of xHashtag is to enhance the DAO voting process. By analyzing an individual’s assortment of #SoulSwag tokens, DAOs can decide whether or not their voting energy is respectable.
Some web3 tasks permit minting Soulbound tokens by offering the mandatory interface SDK and API, like Idexo.