Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.
Ethereum is opening up its protocol for a wider enterprise application and it will need an appropriately scalable solution to achieve this.
Vitalik Buterin, the co-founder and the major face behind the Ethereum Network, is foreseeing a more ambitious future for the ecosystem and the entire decentralized world through “Soulbound Tokens.” A Soulbound Token (SBT) is like a Non-Fungible Token (NFT) that is non-transferable. They are unique in the sense that a Soulbound Token depicts a particular holder’s innate abilities, or qualifications that they have earned that are peculiar to them.
Details about Soulbound Token are contained in a paper co-authored by Buterin alongside Glen Weyl, an economist, and researcher at Microsoft Research as well as the founder of the RadicalxChange Foundation, and Puja Ohlhaver, a Strategy Counsel at Flashbots Ltd. In the paper, the trio described how the new tokens will be the mainstay of a new Decentralized Society that is being ushered in.
The new tokens will be available for use by the end of this year, and it is billed to revamp a lot of areas in which data integrity is of utmost importance.
One notable area in which Soulbound Tokens will be highly applicable is in registering the educational qualifications of people. With this new technology, Universities or educational institutions can issue certificates in the form of SBTs. This will help combat counterfeiting and illicit representations of educational qualifications as forgeries are eliminated completely.
The authors summarized that SBTs can foster “commitments, credentials, and affiliations of “Souls” can encode the trust networks of the real economy to establish provenance and reputation.”
The differences between SBTs and NFTs are notably different as anyone can easily trade their NFTs for another, while SBTs cannot be traded, but users can revoke the SBT token if they so require.
“More importantly, SBTs enable other applications of increasing ambition, such as community wallet recovery, sybil-resistant governance, mechanisms for decentralization, and novel markets with decomposable, shared rights,” the Paper’s Abstract reads.
Powering Soulbound Tokens on Ethereum PoS
Ethereum is opening up its protocol for a wider enterprise application and it will need an appropriately scalable solution to achieve this. From the current upgrade billed to go live by August, the Ethereum protocol will change into Ethereum 2.0, the scalable Proof-of-Stake (PoS) consensus model that has been under development for years now.
The revolutionary model of the Soulbound Tokens is bound to reposition the Ethereum network as a novel pioneer of new innovations as it did with Decentralized Finance and Non-Fungible Tokens.
While the vision for the SBT is still in its infancy, it is subject to many revisions before it is mature and for the first time, blockchain solutions can finally be applied to a number of industries that issues tickets, certificates, or proof of authenticity of credentials or other data-bound assets.
With such provenance that SBTs will introduce, the paper noted that “web3 can eschew today’s hyper-financialization in favor of a more transformative, pluralist future of increasing returns across social distance.”