SBT was first proposed by Vitalik in a January article and elaborated on in Decentralized Society: Finding Web3’s Soul.
Soulbound may be a strange word. It comes from World of Warcraft, where most of the very powerful equipment in the game is soulbound, meaning that once picked up, it cannot be transferred or sold by the player. So in simple terms, Soulbound Token (SBT) can be understood as a non-transferable NFT.
The definition of SBT may be simple, but the idea behind it is profound. The whole world is gradually becoming digital, and the social form and social structure have changed greatly. So how to define individual social identity in such a new society or metaverse, that is, to construct a digital native identity system, may be the fundamental problem that SBT wants to solve.
When it comes to Soulbound, we have to start by talking about RadicalxChange, a nonprofit organization. E. Glen Weyl, first author of Decentralized Society: Finding Web3’s Soul, is the founder of RadicalxChange (and co-author of Radical Markets), whose board includes Vitalik. RadicalxChange also delves into a number of topics, including quadratic voting. This is where the idea behind Soulbound Token originated.
RadicalxChange argues that the underlying architecture of the Internet has long been missing an identity layer. This layer of functionality has long been provided by Internet commerce giants (Google, Meta, email providers, etc.) who have become the de facto identity providers for billions of Internet users. The forms of identity structure created by these commercial services have long contradicted the fundamental spirit of the Internet.
DIDs (Decentralized Identifiers) solve this problem in part: DIDs allow users to generate their own IDs using open standards and store that identity information on a trusted storage platform like a blockchain rather than on the servers of some internet giant. DIDs can be used to uniquely label an information resource, providing a good vehicle for identity, but DIDs still rely heavily on existing centralized authorities to issue various credentials.
It’s not just the carrier of identity that matters, it’s equally important how we define who we are. Simply increasing the number of ID issuers doesn’t make much sense. We need to create new pathways of trust from social networks, leading to a more decentralized identity infrastructure that gradually replaces the old digital power centres (institutions, schools, banks, etc.) that define our identities. Plural Identity provides a solution.
Plural Identity simply means expanding the number of credential issuers as much as possible. I think a plural identity system is a more natural one. After all, even without ID cards and college diplomas and certificates from various other institutions, we have a social identity. Social identity is determined by relationships and trust between people, and the process itself is pluralistic. Multi-identity better embodies the social and multi-dimensional characteristics of human identity. And SBT is really a way of shaping multiple identities.
An account (address) can be understood as a soul. Behind the soul may represent an individual, institution, organization, etc. A soul can have multiple SBTs. SBT corresponds to a range of relationships, memberships, certificates, etc. Individuals or organizations can issue SBTs to other souls, creating a soul network” “ In this network of relationships and trust, our identities are gradually defined. As Georg Simmel, the founder of social network theory, put it: Individual identity emerges from the intersection of social groups just as social groups emerge from the intersection of individuals.
About the application scenarios of SBT, the paper talks very detailed and clear, here are just a few:
- Reputation Provision: For example, now an artist can prove his authenticity and reputation level directly through the SBT he holds instead of relying on web2 platforms such as Twitter
- Web3 Native Credit: Blockchain is a trust-creating machine, but the blockchain world or web3 does not have a trust network, for example, Defi has not yet appeared native credit. Using SBT as a foundation could create a censorship-resistant, bottom-up social credit system that would reduce reliance on centralized, opaque credit scoring infrastructures.
- SBT Community Recovery: SBTs themselves can represent a certain amount of social relationships and social trust, so you don’t have to bother selecting and maintaining account guardians. Just use Soul Communities instead.
- Soul Drops: Target specific SBTs to precisely attract souls.
- Soul Governance: voting using SBT portions instead of financial capital to avoid plutocracy; in quadratic voting, corresponding voting weight is given by calculating the correlation between two souls
The practice of SBT and Desoc is at a very early stage, with no mature standards yet, but several implementations have emerged. There is ongoing community discussion about the implementation of SBT. For example, does SBT have to be put on-chain? How can programmable privacy be implemented?
We share footprints with our friends on the sands of the digital world, and these digital footprints intertwine and confirm each other to form our digital identity. In an open, globally collaborative web3 network, the events we participate in, the contributions we make, the friends we meet, and so on becoming the credentials that define our identity. We feel a trusted network that has never existed in human society is gradually forming, and the trust between people will be transmitted far away.
About Prestare Finance
Prestare Finance (Prestare) is a lending protocol that offers a lower collateral ratio and can even support under-collateralized loans without using off-chain information. Under-collateralized borrowing is achieved by allowing the borrower to use a portion of the previously accumulated interests as collateral to borrow more funds next time. SoulBound Token containing credit score for all users need to be minted if users want to borrow on Prestare. Users with higher credit scores can have a loan with a lower collateral ratio.