What are… Soulbound tokens?
Swish | 04 February, 2023
In a nutshell… Soulbound tokens (SBTs) are non-transferable tokens representing a person's identity using blockchain technology. These can include medical records, work history, or any type of information that makes up a person or entity. Wallets used to hold or issue these records are called "Souls".
Why Soulbound Tokens?
Today, most non-fungible tokens (NFTs) function as ownership certificates for digital art or collectibles, which can be bought, sold, traded or shown off as a symbol of status and wealth.
Soulbound tokens (SBTs) aim to turn the NFT concept into something beyond money and bragging rights, a token that is both unique and non-transferable. While NFTs represent assets and property, an SBT represents a person or entity's reputation. And unlike an NFT, SBTs hold zero monetary value and cannot be traded once issued to someone's wallet.
People can also have SBTs representing different aspects of their lives - from a "Credentials Soul" representing their work history to a "Medical Soul" representing their health records. SBTs will allow people to build a verifiable, digital Web3 reputation based on their past actions and experiences.
- Education history - Rather than issuing a certificate upon completion of a particular course, an SBT which includes the student's credentials can be issued instead, as a verifiable proof of attendance and qualifications.
- Job history - Companies and institutions can also issue official SBTs to past employees, which would function as proof of skill certificates to support future job applications.
- Health records - SBTs can replace the often tedious process of filling out paperwork and verifying one's medical history when switching between doctors or healthcare providers.
- DAO governance - Rather than voting power based on the number of tokens a member holds, DAOs could issue SBTs that assign voting power based on users' interactions with the community. This model would prioritize voting power for the most dedicated users with a strong reputation.
There's no better place to start your Web3 journey than on Swish. Read more about the examples of Soul-bound tokens in action and other Web3 developments on our Swish App here.