Soulbound tokens use blockchain technology to represent a person's identity and are non-transferable. This can include any kind of data that makes up an individual or company. B. Medical Records, Employment History or Other Details. A "soul" is a wallet that stores or distributes these records.
As you may be aware, people have several facets to their personalities, and they typically construct a number of Souls to reflect this. As an illustration, a "Medical Soul" would have their medical information, a "School Soul" would contain their level of schooling, and a "Work Soul" would contain their career history. SBTs act as a "human portfolio," assisting users in creating social identities that can be validated based on their prior history and prior Web 3.0 experience.
Unlike NFTs, Soulbound Tokens don’t have any monetary value and cannot be traded or transferred once it’s issued to someone’s wallet (Soul).
How Do Soulbound Tokens Work?
One of the main issues in the Web3 sector is trust. How can you trust a person's reputation in a system that is considered untrustworthy? Let's take the example of borrowing money. SBT can monitor a user's her DeFi lending history, in addition to other factors that determine a user's risk her profile, similar to traditional bank lending scores.
SBTs may serve as an alternative to decentralized autonomous organizations (DAOs). Instead of the current governance model, which is based on the number of tokens a member has, DAOs might issue SBTs that assign voting power depending on users' participation in the community. Similar to a weighted voting system, this idea would provide the most loyal users with the best reputation the most voting power.
Additional Use Cases of Soulbound Tokens
Besides medical records and employment history, SBTs have additional use cases state below:
This whitepaper claims that Souls and SBTs will be the cornerstones of a decentralized society. This society is characterized as a "transformative and pluralistic future" in which interpersonal relationships and social interactions are key components of the Web3 identity.
By establishing provenance and reputation, Soulbound Tokens will help solve her Web3 trust issues. Because they are non-transferable, individuals are less likely to try to manipulate the ecosystem by buying status or faking achievements. It can also reduce the incidence of Web3 fraud as a result of identity theft and the more complex process of identity theft.
As you may be aware, people have several facets to their personalities, and they typically construct a number of Souls to reflect this. As an illustration, a "Medical Soul" would have their medical information, a "School Soul" would contain their level of schooling, and a "Work Soul" would contain their career history. SBTs act as a "human portfolio," assisting users in creating social identities that can be validated based on their prior history and prior Web 3.0 experience.
Unlike NFTs, Soulbound Tokens don’t have any monetary value and cannot be traded or transferred once it’s issued to someone’s wallet (Soul).
How Do Soulbound Tokens Work?
One of the main issues in the Web3 sector is trust. How can you trust a person's reputation in a system that is considered untrustworthy? Let's take the example of borrowing money. SBT can monitor a user's her DeFi lending history, in addition to other factors that determine a user's risk her profile, similar to traditional bank lending scores.
SBTs may serve as an alternative to decentralized autonomous organizations (DAOs). Instead of the current governance model, which is based on the number of tokens a member has, DAOs might issue SBTs that assign voting power depending on users' participation in the community. Similar to a weighted voting system, this idea would provide the most loyal users with the best reputation the most voting power.
Additional Use Cases of Soulbound Tokens
Besides medical records and employment history, SBTs have additional use cases state below:
- DAO Sybil Attack Protection. The Sybil attack is one of the biggest security challenges for DAOs. If a group or individual accumulates a large amount of Governance Tokens, it can affect voting results. On the other hand, people can see the originality of each voice, so the correlation between soul and voice can be seen in SBT.
- Verification of attendance to an event, similar to Proof of Attendance Protocol (POAP).
- Keep track on a user’s borrowing and lending history on decentralized finance (DeFi).
- Find users’ lost keys by utilizing social recovery.
This whitepaper claims that Souls and SBTs will be the cornerstones of a decentralized society. This society is characterized as a "transformative and pluralistic future" in which interpersonal relationships and social interactions are key components of the Web3 identity.
By establishing provenance and reputation, Soulbound Tokens will help solve her Web3 trust issues. Because they are non-transferable, individuals are less likely to try to manipulate the ecosystem by buying status or faking achievements. It can also reduce the incidence of Web3 fraud as a result of identity theft and the more complex process of identity theft.
