📜 NFTs that display your "soul"
Soulbound tokens - a look into their benefits and dangers.
Today's Highlights
- Soulbound Tokens
- Today's Infographic
- In Other News - a few interesting developments we're tracking.
Soulbound Tokens
In the popular MMORPG, World of Warcraft, there are items that you can pick up that you then can’t transfer or sell to another player known as soulbound items. Similarly, Soulbound tokens are NFTs that can’t be sold or transferred to another person.
In the world of NFTs, the most common practices are to buy NFTs and resell them for more money (or hold on to them like expensive art pieces), but Soulbound tokens beg to answer the question of what if there are NFTs that try to signal something other than what is more expensive?
Recently, Vitalik Buterin, the creator of Ethereum, proposed this idea of soulbound tokens (SBTs) as non-transferrable NFTs held by unique crypto wallets called Souls. These SBTs would allow users to see another’s real-world activities, interests, accomplishments, etc. - something reminiscent of peering into someone’s soul. Some examples of SBTs include university degrees, licenses/credentials, and credit scores.
SBTs also allow for more trust because, for example, someone could say that they graduated from Stanford University on Instagram. But with SBTs, Stanford’s “soul” will have to grant you an SBT of a diploma to your personal “soul” wallet to prove that you actually graduated from there.
This in turn can allow your future employer to just check your “soul” instead of calling up the school for verification. Soulbound tokens allow you to decentralize your identity and allow you to own the keys to them.
However, there are many potential issues with SBTs. Losing access to a crypto wallet is already a headache for many people, but losing access to your “soul” seems like a bigger headache due to you possibly losing your SBT university degree. Another potential issue is your “soul” getting spammed with unwanted SBTs.
The biggest potential issue is privacy. Having key information about one’s self could be a bad idea because it can potentially be used to endanger one’s life if SBTs are abused by people with malicious intent.
These issues can be fixed, however, by implementing more checks and smart contracts to vastly improve privacy and allow users to display and share only what they want others to see. As these kinks are ironed out, soulbound tokens will be an important way, much like a resume, to display yourself while we transition into a web3 world.
🧐 Today's Infographic
In Other News
Helen Partz
Oliver Knight
