What is Soulbound Tokens and what are their differences from NFT?

What is Soulbound Tokens and what are their differences from NFT?

Soulbound – an incorrect token, created for only one address without the ability to move it to another or sell it. Such NFT gives the owner unique rights and capabilities. Token can also confirm compliance with any conditions, act as evidence of involvement in the community, as well as to certify the unique user status.

The idea of ​​SBT belongs to the founder of Ethereum Vitalik Buterina, who first set out it on his blog in January 2022. Buterin drew attention to the practice of the release of rare artifacts in the online game World of Warcraft, which can be added only to one player. He proposed to apply this principle to incorrect tokens: NFT can only be released for a specific address in the blockchain and should be attached to it forever.

To obtain such a token, you may need to fulfill certain conditions or tasks. In return, SBT can provide its owner with unique functions or advantages. For example, Soulbound-Token can be used as a confirmation of the presence of a diploma of education or a certificate of passing courses, or as an “entrance ticket” to a club or community.

Buterin developed the idea of ​​SBT in a new article entitled “Decentralized Society: in the search for the Web3 Soul” (“Decentralized Society: Finding Web3’s Soul”), published in May 2022, along with the economist Glenn Vale, the lawyer of Plazhey Olheiver.

The work describes a model of a new decentralized digital society with the creation of an analogue of “social rating” in China and “digital karma” – all this is based on Web3 technologies, blockchain and indescribable tokens.

Examples of Soulbound Tokens (SBT)

As an example of SBT in the same publication, Butaterin cited the PoAP project, which produces exclusive NFT for participants in thematic events. One of these distributions was held by Adidas, which released the PoAP-Tokens collection in November 2021.

Subsequently, the company used these tokens to access the NFT collection created in collaboration with projects Bored Ape Yacht Club (Bayc), Gmoney and Punkscomic. However, Buterin noted the imperfection of PoAP due to the possibility of their resale.

In September 2022, the first indescribable token on the BNB Chain released Binance Exchange, it was called Binance Account Bound (Bab). Any user who has passed the personality verification (KYC) can create a BAB. After that, the SBT is attached to the address and acts as a confirming certificate, which can take third -party applications. If desired, the owner of token can destroy it and release it again after 72 hours.


SoulBound-Tokenov (SBT) application areas

SBT technology has not yet been widely used in the crypto industry. However, possible methods of application are indicated in the work of Buterin, Weil and Alcheyera, mentioned above.

Social rating and lending

In the future, there will be an opportunity to get a loan or other loan based on a social rating and reputation. It can be recorded in numerical expression in SBT, which will serve the inconsolable way of the borrower to prove his credit history. In the future, specialized products based on SBT can also appear in Defi applications.

Tao and communities

SBT can be used as an integral part of the management mechanism in decentralized organizations (TOO). One of these options for application, using SBT tokens, is already proposed to be implemented in a second -level solution based on Ethereum – Optimism. According to the proposal, indescribable tokens can serve as an access method into individual “chambers” of the Optimism, each with its own functions and restrictions.

Airrods and marketing

Thanks to Soulbound-Tokens, it becomes possible to adjust the airrodes-the popular community mechanism in the crypto industry by distributing cryptocurrency. In addition, SBT can be used for other marketing activities, an example of which has already been demonstrated by Adidas, using Soulbound Tokens as a “VIP ticket”.


The creators of digital art and content can create SBT as a certificate confirming authorship for any subject for collectors and ordinary buyers. This method of application is not limited by art industry and can be used in any situation where the owner of the owner is required, for example, in a diploma of education or certificate of property of real estate.

ID confirmation

The use of SoulBound-Tokens can simplify access to Defi market products and Web3 services. The user can only confirm his personality in one application, release SBT as confirmation and use it in any other applications that recognize this method of verification.

Risks of use of indescribable tokens (SBT)

The use of cryptocurrencies and blockchain applications is associated with a huge number of risks including hacks, theft of personal data, protocol errors and ordinary inattention of users.

In addition to possible advantages, the use of Soulbound-Tokens can bring certain risks, the scale of which has yet to be found out. One of the possible risks may be an intentional address to which SBT is attached to use its properties under the owner of the owner.

Vague and new risks include attack vectors on the confidentiality of users, abuse of social ratings, communities and Tao systems built on the basis of or using indescribable tokens.

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