Crypto trade Binance has introduced BAB, a Soulbound Token on the BNB Chain, as a decentralised resolution to the KYC needs for the exchange. Soulbound tokens are non-fungible tokens (NFTs) that are non-transferrable amongst wallets. The inability to trade the NFT makes it possible for it to be utilized to detect the wallet holder on the blockchain. Facts linked to the NFT can be utilised to pinpoint recorded steps by the wallet, this kind of as interacting with a decentralised application (dApp) or wise agreement.
What are Soulbound Tokens or SBTs?
In Could, Ethereum co-founder Vitalik Buterin released a whitepaper with a extensive description of Decentralised Society (DeSoc) and Soulbound tokens (SBTs). The time period “Soulbound” derived from the Globe of Warcraft activity, was currently discussed in his blog site back again in January.
Soulbound tokens are a individual style of NFT, but they differ in one important way — they are developed hardly ever to be transferred. A soulbound token is linked to a specific Soul, a unique variety of blockchain handle.
Soulbound tokens’ non-transferability allows them to track data that is special to a man or woman or entity and are unable to be properly tracked via NFTs. For instance, a user credential encoded within a soulbound token should really be linked to a individual person, not transferable to any account on the blockchain.
What are Soulbound Tokens for?
Soulbound tokens are supposed to provide as a major creating block of Electronic Culture. One particular of the fundamental features of numerous blockchain platforms is that they provide a degree of pseudonymity. Any person can generate an account on the blockchain, and this blockchain account is tough to connection back again to a user’s authentic-world id.
Though this is fantastic for anonymity and privacy, it makes issues for use conditions where by strong id verification would be practical. Soulbound tokens are made to fill this hole by providing attestations that a specific entity has sure characteristics.
With the large wide variety of details that can be encoded in soulbound tokens, it tends to make perception that a user might have a number of Souls supposed for several functions. For illustration, one Soul may possibly comprise expert facts (credentials, certifications, and many others.), when a different may possibly be employed for professional medical documents, and a 3rd for storing identity documents.
On top of that, ownership of Souls is not restricted to people today. Organisations, software, computer systems, and other entities might have their personal Souls and the potential to use soulbound tokens to observe and validate specified data.