SBT(soulbound token) : what is it?

 Soulbound Tokens (SBTs) were given in May 2022 by economist & social technologist E. Glen Weyl, lawyer Puja Ohlhaver, and Ethereum creator Vitalik Buterin. SBTs are a primitive, or foundational building block, in an emerging Web3 trend known as the Decentralized Society.

DeSoc sits at the intersection of politics and markets and, much like the wider Web3 context into which it fits, is based around principles of composability, bottom-up community, cooperation, and emergent networks that are owned and governed by network users. It aims to augment Web3’s trajectory toward hyper-financialization to something more inclusive, democratic, and decentralized.

SBTs are an essential feature of DeSoc. Similar to a resume or medical records in the non-Web3 world, SBTs are non-transferable tokens that represent “commitments, credentials, and affiliations” that make up the social relations on Web3 networks. In other words, they are tokenized representations of the myriad traits, features and achievements that make up a person or entity.

Crucially, Souls can issue and attest SBTs to other Souls; so for example a college (represented by one Soul) could issue a SBT certifying that a course has been completed to a student’s Soul.

How do Soulbound Tokens work?

At time of publication, no formal Soulbound Token specification exists at the time of writing; they’re still just an idea. That said, some mechanics have already been outlined.

SBTs’ most distinguishing feature is non-transferability. Unlike today’s most popular token standards—namely, fungible ERC-20 tokens like ETH and ERC-721 NFTs like Bored Ape Yacht Club—SBTs are not designed to have a market value and cannot be transferred to another wallet. 

Within a DeSoc context, SBTs are issued by and held within accounts known as “Souls”. Souls are essentially wallets that hold SBTs and are used to establish provenance (the origin of something) and reputation. Souls can be associated with individuals, organizations, or other entities. Importantly, Souls are not intended to have a 1:1 representation to humans. That is, a human can have multiple Souls in DeSoc.

SBTs in and of themselves are simply descriptive and representative. Their power and utility, in part, comes from how SBTs held in Souls interrelate to form emergent communities based on verified affiliations, commitments, and credentials.

The notion of non-financialized and/or non-transferable tokens is not a new concept. In fact, thriving projects today are built on similar principles. For example, POAP proves event attendance with badges that don’t have a financial value. Proof-of-Humanity uses non-transferability to associate profiles with a unique, IRL human.

What makes Soulbound Tokens unique is the way in which they fit into a wider Decentralized Society context. As recognized by the authors of the “Decentralized Society: Finding Web3’s Soul” paper in which SBTs are proposed, the concept is still nascent and underdeveloped. Nevertheless, SBTs stand to be the atomic building blocks with which democratic, composable, and decentralized networks and Web3 societies are built

In their current “Soulbound” form, SBTs are a meager few months old (at the time of writing). The ideas, use cases, and implementations have yet to be discussed, designed, and fleshed out. In this respect, the future of SBTs is a blank slate.

In their purest and fullest expression and manifestation, however, Soulbound Tokens stand to become a foundational element of the Decentralized Society movement, in which communities emerge around shared networks and goods that are owned and managed by the Souls that use them. 

Source : decrypt, Economics times, etherium,  various