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What Is An SBT And Why You Should Know

What Is An SBT And Why You Should Know


Soulbound tokens (SBTs) are “the future” of Ethereum according to the founder of the cryptocurrency, Vitalik Buterin. To summarise, SBTs are NFTs that can’t be transferred once received. You’d hold it in a Soul wallet forever.

Ethereum are innovating again with their Soulbound tokens.

What are SBTs/Soulbound Tokens

Vitalik Buterin has predicted that Soulbound tokens will be available for early use by the end of this year. Twitter user, Jason Levin (@iamjasonlevin) interviewed a co-author of a 37-page paper written to “predict Ethereum’s future”.

Quite simply, transferability is unable to happen. The reasons behind using a non-transferrable NFT may confuse some people. The transferrable nature is a large portion of why people are so into them, however, there are many use cases.

Further, the paper said that the tokens may possibly be revocable by the issuer. In terms of losing a Soulbound token, it has been clarified that they may be recoverable through community recovery, where the Soul is the “intersectional vote” of its social network. To do this, a user curates a set of “guardians” and gives them the power to change the keys of their soul wallet. Guardians could be a mix of individuals, institutions or other wallets. Unfortunately, with this comes a risk of people falling out with their guardians or the guardians passing away, etc.

You can read the full paper here.

The Potential Use Cases

There are several use cases for Soulbound tokens on Ethereum, according to the document and Jason Levin’s Twitter thread. A first use case was listed as a University degree. Think of a university providing a graduate with their certificate as an SBT. Currently, if a university was to give out a degree as a standard NFT, the graduate would theoretically be able to sell it due to the nature of the technology. On the other hand, if it was a Soulbound token, they would be unable to sell it or transfer it.

Next, if a company wanted to hire people who attended a certain conference or event, if that conference handed out SBTs, they would be able to do so as it would be confirmed that they truly went to the conference instead of just buying one on a secondary marketplace.

A final example would be Souldrops. These are airdrops based on computations over SBTs and other tokens within a Soul. For example, a DAO that wants to convene a community within a particular layer 1 protocol could souldrop to developers who hold 3 out of the last 5 conference attendance SBTs, or other tokens showing attendance like POAPs.

If this goes ahead when they hope for this to, in 2024, Vitalik and the team would call this a “decentralized society”.


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All investment/financial opinions expressed by NFTevening.com are not recommendations.

This article is educational material.

As always, make your own research prior to making any kind of investment.





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