What is SoulBound Token? Personalization on the Blockchain and a New Form of Ownership

WhiteBIT
Published 20 September 2023
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What is SoulBound Token? Personalization on the Blockchain and a New Form of Ownership

Content

If you’ve been following the WB Network launch, you’re likely familiar with the concept of SoulBound tokens. But let’s clarify — SoulBound tokens are distinct from NFTs and are not intended for trading. Join us as we debunk misconceptions, outline the development journey, and showcase real-life examples of SoulBound tokens that have already made their mark in history.

So What Is SBT, and How Is It Different from NFT?

SoulBound Token (SBT) is a non-fungible token valid for one address only that cannot be transferred or sold. It is a kind of stamp in the crypto wallet that gives its owner unique rights and opportunities. The token can also confirm compliance with certain conditions, act as proof of involvement in a community, event, or phenomenon, as well as be proof of certification of the user’s unique status.

Vitalik Buterin is the ideological inspirer of the SBT concept. For the first time, the founder of Ethereum shared his thoughts about SBT in his blog. Buterin compared SBT with the most similar phenomenon, NFT, and outlined the main differences between the two concepts based on the weaknesses that NFT can potentially carry. Of course, non-fungible tokens as we know them make life in Web3 interesting and full of new colors, but any idea needs to be improved, and that’s exactly what Buterin is talking about.

He attributes NFT to the category of technological developments, the central motive for using which is status and demonstrability. NFTs have value and some collectability. That is, NFT can indicate the relationship of its owner to a certain phenomenon or event. However, the main characteristic of any NFT is its transferability, that is, it can be bought and sold. And accordingly, the NFT cannot 100% confirm a certain characteristic of its owner and his relation to the information transmitted by the NFT.

SoulBound tokens solve exactly this problem — they cannot be transferred to another person, because they indicate the unique relationship of their owner to a certain event. SBT in this context can be compared to a certificate, driver’s license, diploma on completion of a course, etc. That is, the idea of SBT is to move away from praise and entertainment, which are part of capitalist ideals, towards the representation of a person and the application of blockchain technologies in everyday practices. In the article “Decentralized Society: Finding Web3’s Soul“, Buterin outlined in more detail the idea of non-fungible and non-transportable tokens in the Web3 space.

Where can SBTs be used?

SBTs speak the language of facts, so the areas of their use vary from medicine and labor records to commemorative artifacts about participation in certain events. SBT are stored on the blockchain in special digital credentials of their owner called Souls. Souls on the blockchain personify the data, representing a specific individual or legal entity, or even an entire organization. Let’s consider the potential areas of SBT application.

Education

We’ve already mentioned using SBT as a certificate of attendance at a certain educational institution or course. That is, the university is itself a “soul” that can issue certificates for other “souls” connected to it in the form of SBT. These SBTs may contain information about the student’s academic performance and indicate successful completion of studies.

Medicine

SBT can serve as a kind of medical card on the blockchain to contain all the necessary information about its owner — medical history and contact with medical institutions.

Law and lending

Getting a loan based on social rating and reputation is not a fantasy anymore. It can also be implemented with the help of SBTs, which would serve as a way to confirm the social rating demonstrating this rating with no possibility to apply changes to it.

Participation in DAOs and communities

SBT tokens can be used as part of the governance mechanism in decentralized organizations at various levels and as a certificate of affiliation to the DAO. In addition to the ranking on which voting can be done within the DAO, SBTs can contribute to its greater transparency, protecting the system of decentralized organizations from corruption and Sybil attacks. In such an attack, thieves buy up the majority of governance tokens of a particular DAO to increase the voting weight of their wallets.

AirDrops and Marketing

SoulBound tokens can help improve the AirDrop mechanism — marketing activities within projects that provide for the distribution of rewards for the project community.

SoulBound Token in the Ecosystem of WhiteBIT

The launch of our WB Network blockchain brought SBT to our community as well. To begin with, the ecosystem of the network has a complex architecture, and one of its tasks is to connect the space of the blockchain with the space of our CEX and all its inhabitants in a decentralized and secure way, preserving the anonymity of everyone. For this, we implemented WB Soul Ecosystem — a solution that will become the basis for our future Web3 developments.

The central part of the ecosystem is WB Souls — the digital representation of each blockchain user in the network. They serve as a kind of communication between the exchange and WB Network for a specific user account. That is, now the user of the exchange, participating in the activities of the platform, trading tournaments, etc., has the opportunity to record his achievements in the blockchain in his WB Soul. The way to do this is with SoulBoud Tokens, which, in turn, will serve as proof of involvement in a certain event.

Each WB Soul consists of two main components:

  • Soul Attributes — Changeable WB Soul characteristics (e.g. WBT Holding level).
  • SoulBound Tokens (SBT) that are immutable characteristics of WB Soul that serve as certain certificates of each Soul and represent it as an individual.

What SBT are Already in the Ecosystem?

SBT “EarlyBird”

The first SBT was EarlyBird, a commemorative collectible token certifying the user’s participation in the WB Network testnet.

SBT “WhiteBIT Community Call #1” 

We held a Community Call not long ago where users could chat with our community managers. Participants received their SBT “WhiteBIT Community Call #1” for participating in the discussion.

SBT “WhiteBIT Community Call #2”

In September, we made Community Call again to get together members and managers of our community. Participants received 1 SBT “WhiteBIT Community Call #2” for their questions.

SBT “First Claim”

The participants of the first SoulDrop have also received their memorable tokens. Everyone who participated received their SBT from the “First Claim” collection.

SBT “A+ WhiteBASE: Trading”

This SBT was a well-deserved prize for the excellent score in the WhiteBASE: trading educational project final test and for mastering all 18 lectures about crypto trading in this course.

SBT “Daily Habit”

All the most dedicated participants of the Daily Habit promotion received their special SBT for accomplishing 19+ tasks during the activity.

SBT “Kickstarter of the First Launchpad”

Important events should be remembered, and the launch of the first WhiteBIT Launchpad is just such an occasion! All participants voting for the first project received a collectible token, part of the WhiteBIT Milestones collection. The tokens that will be created for this collection will be dedicated to just such milestones!

SBT “Goodcode!”

Users who use the cryptocurrency exchange’s products and improve the ecosystem’s elements with their development skills can receive SBT “Goodcode!” from the “WB Network Builder” collection.

SBT “Journey Traveled”

The Journey Traveled Telegram survey participants got their honored prizes for completing their mission.

And this is just the beginning! Your SBTs aren’t just a memory, they’re the basis for future activities and benefits, so don’t miss out on the opportunity to give your WB Soul a brand new SBT! Read how to create a WB Soul and write history in the WB Network blockchain!