A Brief Analysis of the Potential Application Scenarios of Binance’s First Soul-Bound Token BAB
Original editor: Colin Wu
Original editor: Colin Wu
On September 8, Binance announced the launch of the first Soulbound Token based on the BNB Chain: the Binance Account Binding (BAB) token, as a proof of identity for Binance users who have completed KYC authentication. On the same day, 14 Web3 projects in BNB Chain (ApeSwap, ApolloX, Galxe, Cyber Connect, etc.) will provide incentives to Binance’s newly released BAB Token holders. The rewards include: exclusive airdrops, claiming NFT, VIP privileges, Daily bonus points, etc. BNB Chain also expressed that it encourages more projects to use BAB Token, which will provide users with more benefits in the future.
benefit
benefit
(1) For ordinary users, the non-transferable feature of SBT will more easily trigger the user's sense of responsibility, because SBT does not have the attributes of finance and wealth, it represents more of a behavioral certificate on the Web3 chain, and can be used verify. The BAB Token holder user represents and certifies that the user has successfully passed the Binance KYC process, which helps to identify and eliminate bot accounts. In the future, by obtaining BAB's on-chain time query, it is also possible to determine whether the user is a loyal user of the exchange. On the other hand, BAB binds the Binance account and the user address, and the behavior of the address on the chain may become Binance’s criterion for judging large customers and privileged owners in the future, so as to win over more core users/big users; To a certain extent, it is also conducive to the prevention of hackers/fraudsters. If BAB is bound, it is equivalent to cutting off the possibility of collecting funds from the address on the chain to the exchange.
(2) For the agreement project party, the user identity of the BAB holder can be used and verified for various purposes not limited to airdrops, rewards, etc. dAPPs can also use BAB Token to classify data on the chain to identify Different types of users are used to differentiate the interaction with users, which may provide the possibility for more diversified tasks assigned to users and the establishment of a more distinctive community attempt. And different SBTs may also represent members of different communities. In addition, some Web3 identity certificate protocols may have sensed the opportunity that Binance intends to open up the relationship between the internal account system and the address on the BNB Chain chain, and are integrating their own ecology with BAB to capture their users, such as Link3 Sweepstakes for early proof of participation for BAB Token users.
(3) Realize the soul binding of governance rights. If there is confusion in the governance mechanism, governance rights can easily be transferred. The current implementation of governance rights is mainly applied to FT and NFT, both of which can be easily transferred. In "Soulbound", Vitalik Buterin believes that whether the goal is to widely distribute governance power or hand over governance power to capable people, it is likely to eventually lead to the transfer of governance power, because the former's concentrated interests may make one person transfer from another. Some people buy governance rights, and the latter often happens that governance rights are acquired by determined but incompetent people. Transferability will likely shift governance power from those who are likely to provide overall value to those who desire power and have strong capital. In the history of DeFi, governance wars are no strangers, such as the most well-known Curve War. In order to ensure that they are in the preferred pool, major agreements provide higher CRV rewards as bribes to attract investors to participate. In the future, the decentralized protocol on the BNB Chain may combine the project's currency holders with BAB Token holders, and grant higher governance authority based on holding time and other conditions.
dispute
A single address cannot represent a user, and faces risks such as changing addresses and losing private keys. Unlike unlimited addresses, limited by KYC, most individuals often only have 1 exchange account. However, BAB Token and quite a lot of SBT are encapsulated in a certain on-chain address, and the data behavior of a certain on-chain address often cannot fully represent the user itself. BAB requires the Binance KYC account to be bound to a certain address. If the user connects an uncommonly used address or hedging address, the data about the BAB user that the protocol party on the chain wants to obtain may not be accurate, and the actual behavior of the user on the chain Behavior with BAB bind addresses can be quite different. In addition, there are frequent hacking incidents at present, and there are also problems such as private key leakage and loss when SBT is bound to the address. At present, some EIP standards are trying more solutions. For example, EIP-5114 believes that SBT should be bound to an NFT instead of an address; Vitalik Buterin also mentioned it in some of his articles, such as in "Soulbound", It is believed that if users care enough about their ENS domain names, they can bind SBT to ENS domain names; Gain governance power.
Original link
Reference article:
https://vitalik.eth.limo/general/2022/01/26/soulbound.html
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4105763
