NFTs are, by definition, tokens that don’t have any value on their own but are assigned to valuable assets to facilitate trade. However, the founder of Ethereum, Vitalik Buterin, has announced the launch of an exciting new use case for the NFTs.
Buterin recently co-wrote a 40-page paper to explain how Ethereum is going to revolve around a new ecosystem called Decentralized Society with souldbound tokens as one of the main attributes.
Soulbound tokens are NFTs that a person can earn based in part on their education and job history. Unlike normal NFTs, these NFTs are non-transferable and represent the person’s reputation and accomplishments as a type of extended resume.
The Real-Life Value of SBTs
Soulbound Tokens or SBTs are shareable as CVs or resumes while being attested to a soul or person. For example, one of the use cases for SBTs would be as a recommendation layer by a company for its employees. Buterin aims to use SBTs as degrees issued by universities, qualification verifications and more, making it difficult for imposters to impersonate anyone.
“The idea is to bolster people’s social identities by customizing them with unique, non-exchangeable badges. In theory, the tokens could help solve some of the problems ravaging decentralized finance, like scams and theft,” Buterin said.
The SBTs will be stored in Soul wallets and can be easily recovered even if you somehow lose the key. The wallet would require consent from Soul community members, that would verify the user’s identity. These community members are called guardians, and the wallet owner can only select them to ensure security.
The guardians can be close friends, family members, trusted institutions, etc. and can authenticate the owner of the soul through conversion, a face-to-face meeting and several other methods.
The SBTs collection is meant to go live by the end of this year and will connect to Buterin’s larger plan to create a decentralized society by 2024.