As the popularity of Web3 and the NFT industry is slowly declining, Vitalik Buterin suggested his own vision of the future of NFTs that may bring a second breath to the industry: the «Soulbound» property of an item from the online MMORPG World of Warcraft.
First and foremost, it is important to clarify what the Soulbound property is. Soulbound is a property of an item that makes it non-exchangeable by mail or auction trading. The game distributes Soulbound items for accomplishing certain quests or picking them up by killing unique bosses.
The Soulbound property usually increases the value of the item on a secondary market. Since it is impossible to sell or transfer Soulbound items, users sometimes sell their entire account just to make money off the one item.
In terms of blockchain and web3, Buterin believes that Soulbound tokens have the potential to change the industry. Soulbound tokens should be presented in the form of non-transferable tokens revocable by the issuer and could be used to represent a certain commitment to real-world events and projects.
The next concept presented by Buterin are «Souls,» which are essentially accounts or wallets on a blockchain that hold Soulbound tokens and form a Web3 identity.
By implementing SBTs, blockchain-based ecosystems have numerous advantages in creating market standards, measuring decentralization, compensating strategic behavior and many others areas.
But the main point of Soulbound tokens, after all, is creating an identity and representation of a user by giving him/her unique traits that no one else has. In contrast to NFTs as we know them, SBTs will represent who a person is rather than what he or she can afford.