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Binance’s launch of a new NFT 2.0 token on Binance Chain is probably one of the most buzzing subjects to discuss as it has been long anticipated for. Stay updated on every detail concerning the Binance Account Bound tokens with this exclusive guide.
With Binance being the world’s largest cryptocurrency exchange, the launch of its first ever Binance Account Bound (BAB) is apparently a new point of attraction for its thousands of users. These tokens were rolled out specifically for users certification, hence a lot of enthusiasts and users are obviously nosy about what could be in stock for them with the Binance Account Bound (BAB).
Binance Account Bound (BAB) tokens is a kind of Soulbound tokens specially created by Binance. The new NFT 2.0 tokens were earlier offered by crypto veteran Vitalik Buterin before it finally launched. Hence it is expedient to properly understand what soulbound tokens are, their use cases and their relevance in this crypto space. This would guide anyone into understanding Binance’s newly rolled out blockchain based tokens better.
Soulbound tokens (SBTs) are one of the latest and trending innovations in the Web3 era. They are non-transferable and unique tokens that function as a representation of a person’s credentials. In other words, soulbound tokens can be described as a type of CV that reflects the memberships, credentials, and affiliations of web3 users.
The iteration of soulbound tokens insinuates owning a blockchain account where users can easily and securely store immutable records like educational credentials, employment history, or works detailing a person’s experiences.
Soulbound tokens are not like NFTs and other cryptocurrencies that can be traded on the open market and transferred from one wallet to another. As the name implies, Soulbound tokens are non-transferable tokens that are permanently bound to a wallet or account for its entire lifespan. These supposed blockchain accounts or wallets that host soulbound tokens are referred to as “Souls.”
Soulbound tokens, as said earlier, are NFT 2.0 tokens. As such, they operate very similarly to the conventional non-fungible tokens (NFTs). The difference is in the aspect of transfer. NFT tokens are transferable, while Soulbound tokens are not.
Considering the fact that the similarities between NFTs and Soulbound tokens outweigh their differences, Soulbound tokens are described as non-transferable NFTs. Basically, Soulbound tokens are non-fungible as they can’t be interchanged, with each token being unique and non-transferable.
Moreso, these tokens deploy a mechanism that helps to enhance trust amongst users. The mechanism allows Souls to issue self-certified SBTs to themselves. However, a prevalent process is when other Souls or SBT creators issue an SBT to another Soul’s address. Therefore, the SBT, its issuer, and Soul’s address can be publicly verified on the blockchain. Hence, anyone can easily track or prove the trust circles of a particular Soul. A crypto wallet is referred to as a “Soul.” Souls are wallets where SoulBound tokens can be stored.
It is correct to say that every form of interactions, especially business inclined interactions, requires a maximum level of trust between the parties. Nonetheless, this is the major challenge faced with the web3 technology due to the high level of privacy and anonymity in web3 protocols. As such, web3 protocols are not completely replacing the structures of web2 as supposed, rather it is heavily reliant on the centralised structures of web2. The good news is that Binance has rolled out its SoulBound tokens, a move that suggests further adoption of SBTs.
The use of Soulbound tokens comes with a number of advantages as it is focused at enhancing the decentralized community. Users of SBTs can enjoy the following benefits:
Meanwhile, Soulbound tokens are also facing certain limitations which could discourage enthusiasts from venturing into them. One of the notable side effects of SBTs is that they are public. Soulbound tokens are aimed towards a sort of innovation that is centred around web3 CV working as proof of the owner’s character. Some crypto wallets holding SBTs are potentially getting unwanted eyeballs only because of their reputation. Therefore, Vitalik Buterin and other coauthors of SBTs consider adding more functionalities as options, such as SBT burning or SBT hiding.
Moreso, the concept adopted by the SoulBound tokens is socially unproven. As said earlier, SBTs are NFTs that are non-transferable, a development that is capable of enhancing governments’ control over the crypto space. Souls with higher credentials might gather together to form a “superior” group for good doings, but there is a concern that the group might steer toward anti-social behaviors. It is a double-edged sword.
In addition, SBTs are facing the issues of interoperability. In addition, there are concerns about the reliability of SBTs issued by third parties. To realize the vision of a DeSoc cited by Vitalik Buterin and his two colleagues, the adoption of SBTs must be wide enough, like NFTs.
As said earlier, Binance has also rolled out its Soulbound tokens dubbed the “Binance Account Bound (BAB)” for user certification. Hence, Binance’s Soulbound tokens would serve as credentials for users who have passed the Know Your Customer (KYC) on the exchange.
In other words, BAB works similarly as other SoulBound tokens. However, it is exclusively designed for users of the Binance exchange as it is built on the Binance chain. BAB has been designed to function as an opt-in feature that will enable only those Binance users in compliance with Know-your-customer (KYC) to mint their BAB directly on their wallets while using the platform.
BAB is limited to Binance mobile app users. The tokens can be minted on old or new wallets and will also be accessible to third-party protocols.
According to the major purpose of Soulbound tokens, the BAB’s primary use case is to serve as a certification to verified Binance users. Hence, Binance users can be certified and have a proof for it.
Moreso, BAB can as well be adopted by decentralised applications (dApps) and NFT protocols. They may use the tokens for different purposes like airdropping to addresses with BAB tokens or allowing minting from BAB addresses to prevent bot manipulations, among others.
Notably, the BAB tokens can be leveraged by third-party protocols to confirm BAB tokens for a myriad of activities such as avoiding bots, airdropping NFTs, and a DAO using it for quadratic voting, etc.
With BAB being the first ever Soulbound tokens to be created by Binance, the platform promises lots of unique functionalities for its BAB users.
BAB is recognized as Binance’s pilot project at the time of writing. Thus, there are several anticipations that additional use cases for BAB will arise in the future as the web3 landscape evolves.
Soulbound is generally recognised as a new kind of token standard that could potentially form an essential building block for the Decentralized Society. Thus, Binance has designed its SBTs to focus on addressing identity issues in the decentralized society. Binance’s BAB will function as online identification for Binance. As such, it is correct to say that the decentralized community will have its identity issues fully controlled in the nearest future.
Soulbound tokens (SBT) are non-transferable and unique tokens that function as a representation of a person’s credentials.
The idea of a token as such emerged from the popular video game, World of Warcraft, which rewarded users with items known as ‘soulbound’, that can’t be traded or sold to other characters.
Soulbound tokens operate very similarly to the conventional non-fungible tokens. The different is in the aspect of transfer. NFT tokens are transferable, while Soulbound tokens are not.
Binance Account Bound tokens are Soulbound tokens designed by the Binance exchange to serve as credentials for users who have passed the Know Your Customer (KYC) on the exchange.
BABs are basically used for user’s certification on the Binance exchange.