Soulbound Token And Their Potential Use Cases
SBT — you can read it in almost every crypto outlook for 2023. Let’s have a look at what SBTs are, why everyone is so excited about it and how we could use them in the future.
Soulbound tokens, also known as non-fungible tokens (NFTs), are digital assets that are designed to be permanently tied to a specific individual or entity. They are usually created using blockchain technology, which allows them to be securely and transparently tracked and verified on a decentralized network. They were first introduced by Vitalik Buterin in a white paper entitled “Decentralized Society: Finding Web3’s Soul”.
The concept behind Soulbound Tokens seemingly comes from the game World of Warcraft (WoW) — which also inspired Buterin, who derived the name for his Ethereum blockchain from the franchise. In WoW, “soulbound” is a property of an item that prevents it from being traded or mailed to another character. With this in mind, it’s easy to see where both the name and idea for SBTs come from.
As with badges in video games, some SBTs may act like real-life achievement badges for completing specific tasks or reaching milestones. In contrast, you receive an SBT when you complete a degree, earn a professional certification, win an award, etc. You can use your corresponding SBT as proof to others that you are the first follower of a musician or that you have been to a specific class.
- Physical assets: Soulbound tokens can be used to represent ownership of physical assets, such as artwork, collectibles, or other items of value. By using a soulbound token to represent ownership of an asset, the ownership can be securely and transparently verified using blockchain technology.
- Digital works of art: Soulbound tokens can be used to represent ownership of digital works of art, such as music, videos, or photographs. This can help artists to protect their intellectual property and ensure that they are fairly compensated for their work.
- Tickets and passes: Soulbound tokens can be used to represent tickets or passes to events or attractions, allowing them to be securely and transparently verified. This can help to reduce ticket fraud and ensure that only authorized individuals are able to attend the event.
- Memberships and subscriptions: Soulbound tokens can be used to represent membership in a club or organization, or a subscription to a service. This can help to streamline the membership and subscription process, and ensure that only authorized individuals are able to access the benefits of membership.
- Licenses and permissions: Soulbound tokens can be used to represent licenses or permissions to use certain assets or services, such as software or digital content. This can help to ensure that only authorized individuals are able to access and use the assets or services in question.
Overall, soulbound tokens offer a flexible and secure way to represent and transfer ownership of a wide variety of assets and rights. By using blockchain technology to track and verify ownership, soulbound tokens provide a transparent and secure way to prove ownership of assets and access rights. It will be exciting to see how SBTs will actually be used in the future but they can be a key driver of a new NFT wave coming in 2023.
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