The second largest cryptocurrency on the market and the creator of the ecosystem believes that the future of Ethereum lies in the identity of the individual on the blockchain
As the popularity of Web3 and the NFT industry is slowly dwindling, Vitalik Buterin suggests his vision of the future of NFTs that could give the industry a second breath: the “soulbound” asset of an item from the online MMORPG World of Warcraft.
First and foremost, it is important to clarify what a SoulBound property is. Soulbound is the property of an item that makes it non-exchangeable by mail or auction merchandise. The game distributes Soulbound items for completing certain quests or by killing unique bosses to collect them.
Soulbound assets typically increase the value of the commodity on the secondary market. Since it is impossible to sell or transfer Soulbound items, users sometimes sell their entire account to make money off just one item.
In the context of blockchain and Web3, Buterin believes the Soulbound token has the potential to transform the industry. The SoulBound token must be presented by the issuer as a revocable non-transferrable token and can be used to represent a certain commitment to real-world events and projects.
The next concept introduced by Buterin is “spirits,” which are essentially accounts or wallets on a blockchain that hold Soulbound tokens and create a Web3 identity.
By implementing SBT, blockchain-based ecosystems have many advantages in the areas of creating market standards, measuring decentralization, compensating strategic behavior, and many more.
But the main point of the SoulBound token, after all, is creating an identity and representation of a user that no one else has. Unlike NFTs, as we know them, SBTs will represent who a person is, not what they can afford.