With the development of Web 3.0, blockchain technology, and metaverse, you must have heard of concepts like digital assets and virtual products. NFTs have played a crucial role in the ownership of digital assets, as they give proof of ownership.
The general notion of NFTs, that people have now, is that NFTs are tradeable assets, which ideally means that they can be sold in a marketplace and transferred from one digital wallet to another. These are what we call transferable NFTs.
However, with recent developments, there’s a new dimension to the world of NFTs!
They are called SoulBound NFTs. They are non-transferable NFTs. They cannot be transferred from one digital wallet to another. They are bound to the original owner's wallet (Soul), which is why we call them SoulBound NFTs.
While the traditional NFTs have their own value and importance, it becomes important to explore the need of having non-transferable NFTs.
Web3 experts believe that SouBound NFTs can pave the way for a decentralized society. Ethereum’s founder Vitalik, calls SoulBound NFTs the future.
There are certain things and assets in life, that are non-transferable and perhaps cannot be owned by someone else. Important documents like passports, birth certificates, or college degrees cannot be transferred, they are earned. Therefore, the owner must always remain the same. These documents cannot be represented by NFTs, because NFTs are tradeable in nature. This is where a new dimension comes into the space: The SoulBound tokens (SBTs).
A prominent example of a SoulBound project is POAP, “ proof of attendance protocol “. They are digital mementos. POAP is a new way of keeping a reliable record of life experiences. Every time a person participates in some event, POAP collectors get a unique badge supported by a cryptographic record.
SBTs would represent a person’s reputation, work credentials, and accomplishments, Vitalik calls it “a kind of an extended resume”.
Academic achievements and work credentials can be recorded as SBTs, that can be verified by the employer, justifying the credibility of the candidate in a more sophisticated manner.
SBTs could ideally help in finance as well. Documenting a person’s credit report, and keeping track of the borrowing and lending process can make the process more transparent and streamlined.
It is expected that SBTs will be available on the Ethereum blockchain by the end of this year. Ethereum holds a larger vision of creating a decentralized society by the end of the year 2024.
With the development of Web 3.0, which many people believe, is the new version of the internet, one thing is certain, ownership of digital assets will increase. People would want to own a part of the internet, they would want to own digital assets that are intangible.
NFTs play a vital role in the authentication of those digital assets. However, there are certain documents and assets that cannot be transferred and are to be owned by oneself. This is where SoulBound tokens (SBTs) will play a vital role in complementing the already existing advantages of NFTs.
We, at Seaflux, are Blockchain enthusiasts who are helping enterprises worldwide. Have a query or want to discuss Blockchain projects? Schedule a meeting with us here, we'll be happy to talk to you.