Explained: What Are Soulbound Tokens And How Do They Work?

Soulbound tokens are not designed to have a market value and as such cannot be sold or transferred to another wallet.

What are Soulbound tokens?

Soulbound tokens, also known as SBTs, are digital identity tokens that represent a person’s or an entity’s qualities, traits, and accomplishments. It advances the use of NFTs because it is built on blockchain technology. NFTs cannot be duplicated or falsified, but they can be sold or transferred. They are connected to a blockchain by a special identification code. But when an NFT is created to serve as a Soulbound token, it is never able to leave your Soul. The Soul here is a reference to your personal wallet. SBTs aim to transform the idea of NFTs into something more than just cash and bragging rights, such as an exclusive, non-transferable token.

Thus, Soulbound Tokens are Non-Transferable Tokens (NFTs) that are tied to your identity. The unique identifying information of an individual or entity, including personal data and history, such as age, qualification, education, health records, and professional accomplishments, is stored on a blockchain network that is connected to them.

History of Soulbound tokens

Ethereum co-founder Vitalik Buterin first broached the subject of Soulbound tokens in a blog post in January 2022. In the article, he talked about powerful “Soulbound items” that can be found in the well-known fantasy game World of Warcraft. These items have the distinctive property of being unable to be sold or traded to another player once they have been acquired. He claimed that many of the characteristics of rare and epic items in a massively multiplayer online game are shared by NFTs in their current form.

Source : Coingape

Leave a Reply

Your email address will not be published. Required fields are marked *