When purchased and acquired by an individual, Soulbound tokens are non-transferable assets that have been tokenized in the form of NFTs. They serve a special purpose, such as preserving an electronic identity. Non-fiat tokens, such as soul tokens and NFTs, can be either electronic or physical possessions that serve as PoS item.
NFTs cannot be duplicated, unlike other kinds of monetary assets.
A recent Twitter survey revealed that many NFT owners are motivated by the desire to profit from their investments. On trading platforms like OpenSea, projects like Bored Ape and CryptoPunks are sold for huge sums of money.
The inspiration
Vitalik Buterin stated recently that the World of Warcraft served as his inspiration when he came up with the term “Soulbound.” Users are not allowed to exchange their Soulbound coins once they have them. They cannot be traded or sent because they are bound to their owners. Only the token’s issuer can burn the token, according to Buterin.
Such tokens can be self-certified, just as we do when we include information about ourselves in resumes and other documents. SBTs can be issued by Soulbound in the interest of an individual or corporation, just like universities award certificates to graduates.
How to use the Soulbound token
By posting on their Facebook page that they earned a degree from Oxford University, anyone can, in contrast, assert that they attended Oxford. Nevertheless, as for the SBTs, a personal wallet must be supplied to prove your ownership.
By distributing your own SBT, you will be able to demonstrate your membership in a specific organization or group. This makes creating fake certificates for yourself very challenging. This will aid in addressing issues with decentralized finance, such as the rise of fraud and NFT theft, in Buterin’s and his colleagues’ opinion.
The selection of NFT creators and projects is heavily influenced by the concept of trust. This is due to the fact that up until now, undertakings like Azuki have been known to lose creators, but now that SBT has been established, the Web-3 users can feel confident.
They will be able to decide whether or not to join the project in light of this. With SBTs, there is only one concern: do recipients stay indefinitely given that SBTs are permanent?
The answer, according to team members, is “no” because functionality is required to prevent SBTs from being published or to destroy those that have already been published. However, since the system is still hypothetical, it is unknown exactly how this functionality works.
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