Original Author: Daniel Li
Original Author: Daniel Li
Soulbound Token, as the latest concept in the blockchain industry, was proposed by V God in early 2022. The word Soulbound originally came from World of Warcraft. Items that are Soulbound (soul bound) in the game cannot be sold or mailed Or give it to others, it can only be used by the player himself. As a veteran player of Warcraft, V God obviously got inspiration from the game, thus creating the concept of Soulbound Token (SBT).
To put it simply, SBT is a programmable, non-transferable but revocable and retrievable token with verifiable information, similar to an ever-expanding personal resume (including educational certificates, employment experience, proof of attendance, etc.) ), through the wallet associated with its social relationship for verification, SBT can help users build a complete identity that is mapped to the real society in the web3.0 world, and solve the user identity system problem that has long hindered the development of the web3.0 world. Therefore, SBT is considered to be an important impetus to realize web3.0. But there are also different opinions. Some people think that SBT is still in the initial stage of research, some ideas are not perfect enough, and there are various drawbacks. SBT is more like a tempting trap for web3.0, and launching SBT rashly will cause disaster. s consequence. So whether SBT is an opportunity or a trap for web3.0, let's discuss it today.
01 What is Soul Binding Token SBT?
SBT is a non-transferable token used to form commitments, certificates or affiliations representing social relationships on the web3.0 network. It can mark the countless characteristics and achievements of people or entities in the form of blockchains , such as: educational credentials, employment history, proof of attendance, or even proof of their artwork.
SBT is a solution to DID (decentralized identity) in the web3.0 world, and it is the confirmation of our personal virtual assets (such as social relations and social value) in the web3.0 virtual world. Through SBT, regardless of your social relationship, social identity and social reputation generated on the chain, you can go to the chain, and SBT is bound to your wallet address and cannot be traded. The social activities, study or work experience you participate in in the real world and in the web3.0 world can obtain corresponding SBT, such as the graduation certificate given by the school you graduated from, the work certificate given by the company you work for, and the experience you have participated in. Non-profit organizations, DeFi platforms that lend or participate in liquidity mining, DAO organizations that have participated, etc. Over time, these SBTs will build your real DID in the web3.0 world.
02 What are the application cases of SBT
Although Soulbound Token has just been launched and is still in the embryonic stage of development, its huge future potential and wide application scenarios have attracted many companies to enter the market. In recent months, major platforms have announced the launch of their own platforms with high profile. For example, Fair.xyz and OpenSea jointly launched the soul-bound token "Minter Token" for NFT, which allows users to mint Minter Token for free based on any NFT they currently hold or have ever held. Become a new way for creators to engage with their communities. There is also Binance Account Bound (BAB), the first soul-bound token based on the BNB smart chain issued by Binance. BAB will be displayed on user wallets to emphasize that they have successfully completed KYC. At present, the application of SBT in the industry can be classified from the following angles.
Applications in the field of art
SBT can help artists build their reputation in the target community of the web3.0 world and make these reputations verifiable by buyers. Artists can use their own SBT identity wallet to issue NFT. The many SBTs in this identity wallet are the proof of the artist's online and offline real activities. Therefore, artists bind their real identity to their works in a direct and on-chain way Together, buyers can better verify identity, provenance of artwork, etc. Having an artist wallet with SBT and the online social network where the wallet is located can help defend against artwork plagiarism, deep forgery, and more.
Soul airdrop to avoid Sybil attack
DAOs centered on community governance often use airdrops when convening and forming new communities, but the accuracy and effectiveness of this method are not high, airdrops may not be sent to real participants, and Vulnerable to sybil attacks. The so-called sybil attack refers to the fact that in a community organization, a single user can own multiple wallets and hoard tokens to achieve 51% of the voting rights, and then manipulate decisions. The use of SBT can provide a way to defend against such attacks, because they can more easily identify real individuals and soulless robots. Through the screening of SBT, soul airdrops can be achieved, and real participating users can be matched. Links can revoke the voting rights of those identified as Sybil attackers.
Wallet Account Recovery
For crypto investment participants, losing their wallets is a very difficult problem. Once the wallet is lost, the probability of recovering it normally is very low. Although some wallets have set up a social recovery mechanism, that is, setting up several trusted wallet guardians, these guardians still need daily maintenance, which undoubtedly increases the economic cost, and once they have a bad relationship with the wallet guardians, they may not be able to pass This method retrieves the wallet. Relatively speaking, the community recovery wallet account model provided by SBT has more advantages. It only needs the majority of people who hold several SBT communities to pass through the recovery. On the premise of ensuring safety as much as possible, it makes wallet asset recovery easier.
Unsecured on-chain lending
Currently, it is difficult for the web3.0 ecosystem to replicate the unsecured loans or credits of traditional finance, because we have not yet established a trust-based on-chain credit mechanism. But in the ecosystem built by SBT, unsecured loans or credits will be realized. We can create a censorship-resistant, bottom-up alternative to the top-down and centralized commercial social credit system. SBTs, which represent educational credentials, work history, and rental records, can serve as personal credit history, allowing "souls" to secure loans with good reputation as collateral.
Proof of Attendance Agreement
The non-transferable, verifiable nature of SBTs makes them ideal for proof of attendance at special occasions, participation in community organizations, networking meetings, and more. A current project that is close to this type of SBT is "POAP". The full text of POAP is Proof of Attendance Protocol, which aims to provide a badge service that uses blockchain to record life experience. Event hosts can customize the badge design and send it to event attendees. However, one of the biggest disadvantages of POAP is that it is a tradable NFT, which is easily quantified by money, which also reduces its trustworthiness to a certain extent, and SBT, which has non-transferable attributes, may become the best attendance proof protocol in the future.
03 What opportunities does SBT bring to web3.0
The real value of SBT lies in the fact that people can establish a bottom-up personal credit scoring system in the web3.0 world. It connects souls and communities from bottom to top, enhances sociality, and crosses social distance. It provides more opportunities for building real and virtual web3.0.
1. SBT provides an opportunity to build a real DID in the web3.0 world
In the web3.0 virtual world without SBT, the user's identity is represented by a string of wallet addresses starting with 0x letters and numbers. The wallet address has become the only way to identify users. Faced with the same confusing and complex digital account identities, we cannot identify which one is the real person or which one is the person we need to find from among the many identities. DID has become an important factor affecting the long-term development of web3.0 in the future.
On the one hand, because it is impossible to determine the real identity of the other party or whether they are real people, we have no way to establish a truly effective social relationship and social network in web3.0. On the other hand, due to the lack of identification means, the probability of being caught in a crime in the web3.0 world will become extremely low, which is tantamount to condoning crime in disguise. This brings uncertainty and security risks to web3.0.
The emergence of SBT provides an opportunity for web3.0 to solve the above problems. It maps the value system in real life to the web3.0 world, and establishes a corresponding real identity label for the DID identity in the virtual world. We can use SBT to judge the other party's occupation and social reputation, and once DID gets SBT, it will be bound to your wallet address, becoming the only bound soul token, and SBT is not allowed to increase or withdraw by itself, only It can be revoked by the issuing institution, which also ensures the credibility of SBT.
2. SBT provides an opportunity to break the data monopoly in the web2.0 era
The existence of SBT is not only to rebuild the personal reputation evaluation system similar to the web2.0 era in the web3.0 world, but more importantly, it solves the long-standing problem of personal data ownership in the web2.0 era. We are currently exposed to Internet celebrities and some Internet celebrities have millions or even tens of millions of fans. In fact, the ownership of these fans and accounts is not really in the hands of the person who created or operated the account, but in the hands of the company that provides the platform. Big Vs and Internet celebrities are more like managing accounts for the platform, and the platform holds the power of life and death of the account.
The emergence of SBT provides an opportunity to solve this problem. It can solve the problem of personal social data migration. In the future, all your social data, including the people you follow, the people who follow you, and your private domain traffic will become your Personal reputation assets, these reputation assets will be bound to your wallet in the form of SBT, and cannot be transferred or replaced. With SBT, we no longer have to worry about losing all your social relationships because a certain platform bans your account. We can carry our reputation assets to other platforms when the platform bans your account. It can be said that SBT allows the web3.0 world to truly realize that the creator of data belongs to the creator himself, which is also for the future development of the web3.0 ecosystem. Builders and content operators provide more incentives.
3. SBT promotes web3.0 users to comply with industry rules
The web3.0 world has long lacked effective DIDs, leading to frequent occurrences of various frauds and crimes. At the same time, the lack of effective punishment means has also led some weak-willed people to commit crimes under the temptation of money. In the web2.0 world, we can track the user himself through the user's real-name authentication information, so in the web3.0 world, SBT can also play the same role. SBT can not only help users establish personal reputation in the web3.0 world, but also For some people with illegal and criminal records, some corresponding institutions will also issue SBT representing low reputation to the user and bind it to the user's wallet address. Through the SBT on the user, we can identify whether the user is trustworthy. In this way, it can not only play a great warning role, but also reduce the probability of fraudulent incidents.
The emergence of SBT also provides an opportunity to build the web3.0 order. When a person commits a crime on the chain, he has to consider whether this behavior will affect himself in reality. When the evildoers can be identified and punished accordingly, then the rules and regulations will be followed.
4. SBT provides an opportunity for the web3.0 world to establish a credit financial system
In the current DeFi field, because there is no unified online identity system, credit or unsecured lending is basically impossible. The emergence of SBT provides an opportunity for the establishment of a credit financial system in the web3.0 world. Using SBT can create a censorship-resistant, bottom-up alternative to replace the top-down commercial and social credit systems in traditional societies (such as central bank Credit reference system or Ant Sesame Credit Score, etc.), with SBT, just like "Sesame Credit Score", people can use the SBT in their wallets to realize unsecured loans. And users actively participate in various social activities in the web3.0 world, which is also conducive to improving their SBT credit score, and the higher the SBT score, the higher the amount of unsecured loans that users can obtain. To a certain extent, the enthusiasm of users to participate in community activities has been improved.
The personal reputation system built by SBT provides more opportunities for the web3.0 world to expand and enrich financial application scenarios. Financial services in the future web3.0 world will not only be highly leveraged financial lending services, but richer and more inclusive financial services will also be realized on web3.0.
5. SBT can make DAO's community governance more fair
At present, the token voting system that web3.0 and DAO rely on has serious drawbacks. Sybil attacks and whale manipulation of votes often appear and are becoming more and more serious. The lack of fairness and inclusiveness in DAO community governance also seriously hinders the construction of the web3.0 ecosystem. SBT provides an opportunity to solve these problems. First of all, through the SBT on each community member, we can screen out fake robot accounts and non-target members of the community. Secondly, through SBT, each community member is endowed with governance rights. This authority is not fixed. It is related to user participation in discussions, attendance at events, and regular voting. The higher the user participation, the higher the governance rights, and the corresponding voting rights will be higher. This can greatly avoid the problem of whale manipulation of votes and robot attacks.
Another application of SBT in voting is to avoid the centralization of DAO and ensure that there are different voices in the community. SBT can track the opinions of different community members before voting, and break up some votes or groups that are too centralized to ensure Minority voices have always been represented.
04 What are the pitfalls of SBT?
SBT seems to have unlimited potential in the future. When most people are excitedly preparing for the arrival of SBT, some people express a negative attitude. They think that the current SBT is still in the early stage of research and development, and most of the future imagination and application prospects are only It is still in the stage of theoretical discussion, and some of the ideas are not perfect at present. The rash implementation of SBT is not a good thing for the current web3.0 development, but more like a trap.
Private issues
The privacy issue is the biggest resistance to the implementation of SBT, and it is also the most controversial issue for users who oppose SBT. How to ensure the acquisition of real user data to build a web3.0 DID social circle and social reputation without compromising personal privacy? A tough challenge for SBT. If too much user information is exposed, people will think that the SBT system is not complete, and the exposed people are also vulnerable to malicious actors; if too little user information is obtained, then the credibility of SBT will be questioned. The issue of privacy protection has always been paid attention to, especially in the blockchain industry that lacks privacy protection, people have more urgent needs for privacy, and it is unacceptable for most people to give up privacy protection in order to achieve SBT , so how to strike a balance between SBT and privacy protection in the future will become the most important factor affecting the development of SBT.
Risk of being attacked
Security issues have always been a top priority in the blockchain industry. SBT has prevented DAO from being attacked by witches to ensure the safety of the community, but it has also brought new risks. SBT has a non-transferable binding with the wallet, but users often need to change their wallets for many reasons, such as transferring assets to multi-signature wallets for safety reasons, which will inevitably lead to loss, which is different from loss in the real world. Compared with ID cards, the consequences of the loss of SBT may be more serious. Some hackers may use the user SBT to apply for various loans, or even engage in various illegal and criminal acts, and the corresponding consequences may need to be borne by the user himself. On the other hand, in real life, if the ID card is lost, we can still reissue it, but if the SBT is lost, it may not be able to be retrieved again, because some activities and experiences cannot be copied, which means that the experience you have gained on the chain before And honors may all go to zero.
bribery issue
The emergence of SBT has made DAO community governance more fair, but it is not without loopholes. Interested parties may bribe souls with specific SBTs in order to obtain the governance rights and voting influence of the agreement. People with higher voting rights and influence in the community will have a higher probability of being bribed, and bribers can find people who disagree more easily through SBT on users, and even find people in reality through SBT. The two parties trade off the chain, so even if they are discovered, they cannot get conclusive evidence. So to a certain extent, the emergence of SBT provides convenience for bribers.
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