SBTs: What Are Soul Bound Tokens?

SBTs: What Are Soul Bound Tokens?

Vitalik Buterin, the Ethereum co-founder, is working on a new and intriguing project. As he moves toward further revolutionizing the Web3 realm, he hopes to add Soul Bound Tokens (SBTs) into the equation to find “Web3’s soul.”

Soul Bound Tokens are essentially non-transferable identity and reputation tokens. They make it possible for people to use blockchain technology to verify every aspect of their identities. While this may sound like a terrific idea, the concept remains contentious. 

Although using Soul Bound Tokens has been promoted as a more efficient and reliable verification method, many people have drawn parallels between this and China’s authoritarian social credit system. 

So, which view is more accurate? 

Unfortunately, there’s no black-and-white answer. Read on as we explain all you need to know about the tokens that could change your life in a BIG way in years to come.Table of Contents


By now, everyone (should) at least know what an NFT is—namely, a blockchain-based digital token of information (data). Every NFT has its unique identification number and metadata, ensuring that the data it contains cannot be manipulated. 

Regular NFTs can be purchased or distributed for free. In other words, they are not bound to any person or group.

Simply, Soul Bound Tokens are just permanent, non-transferable NFTs that cannot be given away or removed from your private blockchain wallet. Some Soul Bound Tokens may function similarly to real-life accomplishment badges, such as those obtained in video games upon accomplishing a specified activity or reaching a predetermined milestone. 

Instead of a badge for fighting an opponent or saving the princess, you can get an Soul Bound Tokens for obtaining a degree, winning an award, and so on. Even if it’s for something as unique as becoming the world’s greatest authority on dodgeball, your accompanying SBT will serve as a mechanism for others to validate your success.

However, Soul Bound Tokens can be used for more than just achievements. They may be linked to other characteristics, attributes, and personal information. 

An Soul Bound Tokens, for example, might be used to confirm your identity, birthday, political affiliations, charity giving, criminal record, medical history, nationality, religious background, military history, and other information. The options are virtually limitless. The critical thing to know is that Soul Bound Tokens are all of your personal information, split down into individual NFTs and saved in your private blockchain wallet.


With the exception of their non-transferability, Soul Bound Tokens function similarly to NFTs, which is why Ethereum developer Vitalik Buterin refers to them as non-transferable NFTs. 

Souls can issue self-certified Soul Bound Tokens to themselves. However, another common approach is when other souls or Soul Bound Tokens makers send an SBT to another soul’s address. The SBT, its issuer, and Soul’s address can all be publicly verified on the blockchain. As a result, anybody can simply track or prove a Soul’s trust circles.


Web3 and its ecosystem of decentralized solutions have seen rapid growth, offering various innovations that are challenging conventional wisdom in a variety of sectors. Despite this substantial expansion, web3 has multiple constraints that prohibit it from progressing to the next level.

While concepts like proof of work, proof of stake, smart contracts, and public/private keys have helped to solve some of these concerns, others remain. 

One of the key issues is the lack of confidence in Web 3. Every human connection or commercial transaction is founded on stakeholder trust. However, web3 is disadvantaged in this area due to the high level of anonymity and secrecy in web3 protocols. As a result, web3 protocols have become increasingly reliant on the centralized structures of web2, which they are designed to replace.

Think of it this way:

  • NFT collectors rely on Twitter and OpenSea to show proof of their collections.
  • DAOs rely on web2 platforms like Discord to avoid Sybil attacks and transition from coin voting.
  • DeFi lending platforms cannot make uncollateralized loans.

Soul Bound Tokens might be the missing link in Web3’s trust bridge. Because of their non-transferability, they may be used to establish social identities that allow protocols and people to rely on trust while protecting privacy.


Soul Bound Tokens

have the potential to unleash benefits that will change how we perceive social identities in real life.

NFTs, for example, may be used to demonstrate what a person has and can buy, assist content producers, and even boost crowdfunding efforts. However, Soul Bound Tokens go beyond the monetary incentive to serve as a tool for people to prove who they are and authenticate their reputation.

Soul Bound Tokens allow users to view a person’s immutable history before doing business. Soul Bound Tokens, for example, can be used to check a candidate’s experience before hiring them. Before renting a property to someone, you could observe their SBTs. The potential benefits of Soul Bound Tokens to the world are vast, and they may even permit achieving a genuinely decentralized society.


What if your Soul wallet is compromised? What if you misplace the key to your Soul’s address? Sadly, this is a legitimate problem. As previously stated, stealing is common in the NFT community. When it comes to Soul Bound Tokens, having sufficient protections or contingency plans is critical to prevent malicious individuals from taking identity theft to a new level.

Buterin recommended a community-wide adoption of a “social recovery model” in response to this issue. Users of social recovery might select a group of individuals or entities as “guardians.” If a user’s wallet is hacked, these guardians have the power to access and update the private keys. 

However, it has been highlighted that retrieving a Soul’s private keys would “need the approval of a member from a qualified majority of a (random subset of) Soul’s communities.”

However, this does not entirely resolve the problem. For example, if the people nominated as guardians have died or the connections have broken down, it will be difficult to retrieve stolen SBTs. What if a group of guardians chooses to band up against someone with whom they have had a falling out? The consequences might be disastrous.

Buterin believes that by allowing a larger community to assist in the recovery process, Soul Bound Tokens will be at least a bit easier to retrieve if stolen.


  • Allow for the development of stronger trust connections in decentralized systems.
  • Enable DeFi lending platforms to make unsecured loans.
  • Have the potential to enhance voting processes in DAOs 
  • Can assist in hiring the best applicant for a position.


  • Could expose too much personal information about a person.
  • Are a novel idea, and implementing them right now may be difficult.
  • If deployed on proof-of-work blockchains, Soul Bound Tokens may face criticism for being energy-intensive.


Soul Bound Tokens are a novel concept that many people are looking at, especially following Vitalik Buterin’s blog article in January 2022. As a result, numerous questions must be addressed before SBTs may go live.

According to Vitalik Buterin, the idea will soon be tested on the Ethereum blockchain. However, there is no actual set timeframe for when they will be available because anyone can launch one sooner than anticipated.

If you’d like to learn more about NFTs and Web3—you’ve landed on the right page. At Kadima Digital, we go gaga when it comes to anything Web3 and NFT-related. If you’re thinking about launching an NFT project, give us a holla! We have extensive hands-on knowledge and experience helping NFT projects run effective marketing campaigns from pre-launch to mint and post.


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