Soulbound Tokens (SBTs) can invalidate NFTs.. Coinbound founder and CEO Ty Smith says these are non-transferable and provide individuals with an official digital identity.
Vitalik Buterin, best known as co-founder of Ethereum has new and exciting projects underway. To further revolutionize the Web3 space, he is bringing Soulbound Token (SBT) into the mix to find the “soul of Web3”.
Non-fungible tokens (NFTs) have different use cases, but SBTs can completely override NFTs, thus eliminating the possibility of participants speculating on such digital assets.
Unlike NFTs, SBTs are non-transferable and provide an identity. Tokens deconstruct part of an individual’s personal information before storing it in a blockchain wallet.
So let’s dig into the invention of this new token and its possible use cases.
Soulbound Token: What is SBT?
First and foremost, understanding how digital assets differ from NFTs is essential to understanding the need for SBTs. Both NFTs and SBTs have identification codes and metadata that make them unique. However, SBT has a crucial difference in terms of transferability.
Anyone active in the Web3 space will be aware of the industry challenges that arise from time to time. Significant issues include crypto-fraud, commonly associated with the sale of NFTs following fake accounts.
This is where SBT comes into play. Tokens are a new blockchain-enabled protocol that represents credentials, non-transferable commitments, and ownership affiliation.
Other benefits include:
- Fewer Web3 frauds due to more complex identity theft and impersonation
- Contains the best DeFi protocols for under-collateralized loans and personal loans
- Access to shared data and assets
- More governance for community incentives
- Confirmation of event attendance, university graduation, etc.
It is important to note that unlike NFTs, SBTs exist on the marketplace “Soul”. NFT Curators and Collectors will be able to link their Soulbound tokens in other marketplaces, but providing proof of ownership is approved and detectable.
Soulbound Token: A Potential Use Case for SBT
SBT allows individuals to verify and document all their personal information (employment proof, educational background, government-issued identification, lifetime affiliation, etc.) through blockchain technology.
According to Staderlabs, these digital asset use cases could be the foundation of a decentralized society.
But what are the most notable use cases behind these digital assets?
Certificate of incumbency
Similar to the way resumes are shared during job searches, SBTs have the ability to self-certify that they have worked in a particular industry and claimed to have a range of skills.
Digital assets help verify a candidate’s experience before applying for a job. For example, managers can look at an individual’s educational background and skills to help understand their experience and whether it will benefit their company.
SBT can act as a variety of physical achievement badges to prove your achievements to others, like physical medals that show your achievements but are digitized. Educational institutions can even issue degrees through such assets, thanks to their governance.
So instead of hiring managers contacting educational institutions to verify admission, they can verify the Soulbound tokens they received upon graduation.
Another use case for SBT is to store all government-issued identification such as driver’s licenses, passports, and birth certificates. Then, for example, when you show her Soulbound token at a conference or other event, you can automatically identify that person’s verification.
On the plus side, event runners can keep participants’ soulbound tokens to better understand their target market.
These types of identification can also check people. As a result, SBT acts as an identity, making individuals accountable for their actions. Therefore, people cannot escape practices below the belt.
Evidence of Lifelong Relationships
Additionally, SBT have the potential to demonstrate evidence of lifelong affiliation with an organization or institution. This is especially useful for those who want to know how dedicated they are to a particular sector or project before moving forward with their business.
Many Web3 affiliates welcome members and offer benefits such as tickets to exclusive events based on ownership. SBT may be used to access such events while maintaining a history of other events attended and made available to interested parties.
Soulbound tokens for marketing
Over the past year, NFTs have been used for various applications including NFT marketing. For example, popular companies like WaWa use his NFTs in marketing as a quick way to excite consumers. It is wise to think that Soulbound tokens will also be used for marketing.
The most common use cases for SBT marketing are for engaging with fans or customers, or as a token of appreciation for purchasing a product or attending an event. To facilitate such marketing options, companies like Versify make it easy for brands to send their NFTs and SBTs to their customers.
all things considered
The opportunities SBT brings to the world and the Web3 space are immense.
SBT gives governance rights to all members. Demonstrating proof of employment, education, government-issued identification, and lifelong affiliation creates safer business and personal relationships.
SBT solves the problem of financial strength. Tokens also allow users to observe the immutable history of people, thus reducing the possibility of fraud regarding fake accounts.
Tokens enable the realization of a fully decentralized society. It may sound cliche, but the benefits of SBT are endless.
About the author
Ty Smith is the founder and CEO of coin bound, Web3 Marketing Agency. He has been passionate about and invested in Web3 and the crypto space for years. His determination and strong belief in the power of cryptocurrency has earned him great acclaim in these nascent industries. Ty and his team have worked with some of the biggest names in the crypto industry, including MetaMask, eToro, Nexo, Voyager, Cosmos, ShapeShift, and OKCoin. Not only has he bootstrapped his Coinbound into his seven-figure agency, but he’s also the host of The Crypto Marketing Show, which has over 50,000 monthly listeners and his Twitter followers of over 20,000. I have.
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