Soulbound Tokens (SBTs) Meaning

Jun 5, 2024 | Updated Jun 5, 2024

Soulbound Tokens (SBTs) are a specific kind of NFT that cannot be transferred once assigned to a particular wallet.

What Are Soulbound Tokens (SBTs)?

As you may know, a Non-Fungible Token (NFT) is a digital asset that is provably unique. NFTs can represent any asset, from digital ones like art and music to physical assets like property deeds and luxury goods. Soulbound Tokens (SBTs) are a special kind of non transferrable NFT. Ethereum co-founder Vitalik Buterin coined the term in 2022 to discuss the possible utilities of a token permanently linked to an individual’s wallet that could not be sold or transferred.

Characteristics of SBTs

As mentioned, the unique trait of Soulbound Tokens is that they are non-tradeable. This property guarantees that once an SBT arrives in someone’s wallet it cannot be transferred to another one. This feature makes SBTs useful for storing identity and certification data because it ensures the information passed on to the token is genuine and traceable.

SBTs could function in various ways:

Digital Identity: Soulbound tokens could be used to verify an individual’s digital identity or earned credentials e.g. Virtual Drivers Licences, Passports, and University diplomas.
Medical Records: Healthcare centers could use SBTs to securely store and manage medical records. These would not be transferable but easily available for approved access, thus ensuring patient confidentiality.

Memberships and Affiliations: While many NFTs market themselves as memberships to a community, SBTs could signify more formal club or organization membership. This would be useful for groups with strict membership requirements such as professional associations, private members’ clubs, and University alumni groups.
Achievements and Certifications: This can include any achievement or certificate that an individual may have acquired such as work history, education credentials, or special awards.

SBTs offer a secure and verifiable way to represent personal credentials and achievements on the blockchain. Their non-fungible and non-transferable nature guarantees that the information being presented is true and accurate since it cannot be replicated in any other way across Web3.