The Potential of SoulBound Tokens in the Web3 Ecosystem

The Ethereum co-founder, Vitalik Buterin along with his team published a white paper titled “Decentralized Society: Finding Web3’s Soul,” in which the team envisioned a fully decentralized society (DeSoc) and how it can be made into reality.

The paper argues that in fully decentralized society, there should be no need for central points of control. To that end, they suggest the creation of a new type of token, called a SoulBound Token (SBT), which would be "soulbound" to its holder. In other words, it would be impossible to transfer or sell the SBT. This would effectively create a form of digital asset that could not be centrally controlled or manipulated.

While the idea of a fully decentralized society is still very much in its infancy, the concept of a SoulBound Token is an intriguing one. It will be interesting to see how this idea develops in the coming months and years.

What are SBTs?

SBTs are a new type of digital asset that does not allow you to transfer or sell them once you have received them which ultimately forms your digital "soulbond" with the token. Based on the EIP used to develop the soulbond, they can be crafted so that they cannot be burned or transferred, or they can only be burned under specific conditions.

The potential of SBTs is massive and they aren’t just about owning a non-transferable digital asset, they can also be tied to various features and information. Ideally, in decentralized society, they can be used to verify a person’s identity.

How do SBTs work?

SBTs work by issuing a non-transferable token to a specific address. This address can be someone’s personal wallet, a smart contract, or any other type of address so that they can't be transferred to another wallet. Once an SBT is issued, it cannot be transferred or spent without the original issuer's permission. This permission can be granted through a variety of methods, including a time-locked contract, a multi-signature contract, or a simple signature from the original owner.

How are SBTs different from NFTs?

We've all heard of and witnessed NFTs being traded and transferred from one wallet to another. SBTs, on the other hand, will be non-transferable. SBTs may use the EIP-5114 token standard, which defines tokens as "Soulbound Badge," ie. A badge that is attached to a "soul" at the mint time and cannot be transferred after that. This opens up a whole new world of opportunities for SBTs to be used to their full potential.

Potential use cases for SBTs?

The wide range of use cases for SBTs has been widely discussed and it all comes down to the fact that SBTs can be used for a variety of applications, from simple to complex.

Academic History

As of now, students who graduate from college receive graduation certificates. Upon implementation of SBTs, the same college could issue graduating SBTs containing the student's information and credentials proving that they possess the relevant degree from the institution issuing the SBT.


We have all seen NFTs used as rewards for community members who have been loyal supporters from the beginning, but it will be fascinating to see SBTs in action. For instance, SBTs can be distributed to all early supporters of a project or to those who complete particular tasks.

Identity Verification

SBTs can also help with identifying individuals. Governments can issue an SBT containing all the credentials of an individual which can act as proof of humanity on the blockchain.


It may sound cliche but the possibilities with SBTs are endless. While they are not widely used and are yet to be implemented, the debate about whether they will replace NFTs or not is open for discussion. The spirit of Web3 is still high and mighty as far as technological developments are concerned. We will definitely see projects and dApps developed keeping SBTs at the forefront.

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