What’s a Soulbound token? A Missing Piece for DeFi Mass Adoption
Introduced in a whitepaper “Decentralized Society: Finding Web3’s Soul” just a few months ago by Vitalik Buterin, E. Glen Weyl and Puja Ohlhaver they’re already here!
Here’s how soulbound token works and a few projects implementing them.
Soulbound tokens (SBT) represent a person’s identity on-chain. SBTs are like NFTs, but they are non-transferable therefore ‘bound’ to your ‘soul’.
Soulbound token concept inspiration came from items received on World of Warcraft game. Users in the game can pick up an item that is then ‘bound’ to the character’s ‘soul’. They cannot be sold or traded.
Soulbound tokens can record your educational, employment, medical or even credit history. Or serve as proof of attendance certificate.
Lack of a native Web3 identity prevents DeFi reaching the real world economy, such as an apartment lease.
According to the paper authors, “perhaps the largest financial value built directly on reputation is credit and uncollateralized lending.” By aggregating all activity from of…