What is a Soulbound Token?

Jacob HoekertJacob Hoekert
Jun 29, 2023|2 min read


In the rapidly evolving world of blockchain technology, Soulbound tokens (SBTs) have emerged as a groundbreaking concept that aims to transform the way we perceive and utilize non-fungible tokens (NFTs). This article will delve into the intricacies of Soulbound tokens, their functionalities, and their potential impact on various industries.

Understanding Soulbound Tokens

Soulbound tokens, also known as SBTs, are digital identity tokens built on blockchain technology. Unlike traditional NFTs that can be bought, sold, or transferred, Soulbound tokens are non-transferable and permanently bound to the owner's private wallet, referred to as the "Soul." They serve as unique representations of a person or entity's characteristics, traits, achievements, and affiliations.

Utilizing Soulbound tokens for Individuals and Entities

Individuals can possess multiple “Souls,” each representing different aspects of their lives, such as education, work history, or health records. By accumulating SBTs in these Souls, individuals can develop a verifiable digital reputation based on their past experiences and actions, increasing their credibility in various domains.

Entities, including companies and organizations, can also utilize Souls to allocate SBTs. For example, a company can issue SBTs representing work experience to its employees, which can be stored in their respective “Souls.” These SBTs, along with other credentials and qualifications, contribute to the individual's overall digital identity and reputation.

Benefits of Soulbound Tokens

The use of Soulbound tokens brings several advantages to the digital ecosystem:

  1. Enhanced Verification and Documentation: Soulbound tokens provide authenticity and eliminate the risk of forgery by being permanently bound to the owner's Soul.
  2. Improved Hiring Processes: SBTs act as proof of qualifications and work experience, aiding in the selection of the most suitable candidates for job positions.
  3. Reliable Connections in Decentralized Power Structures: SBTs facilitate the establishment of trustworthy relationships in decentralized networks, fostering a more robust and transparent ecosystem.
  4. Identity Verification in Metaverse Projects: Soulbound tokens can be utilized to verify one's identity and access specific metaverse platforms.
  5. Strengthened Governance in DAOs: Soulbound tokens can enhance voting procedures in decentralized autonomous organizations (DAOs) by ensuring that voting power remains with genuine contributors rather than being influenced by token holders with vested interests.

Practical Applications of Soulbound Tokens

Soulbound tokens find use cases in various domains, including:

  1. Education History: Soulbound tokens can replace traditional degree-issuing processes and serve as proof of educational qualifications and attendance.
  2. Job Applications: Soulbound tokens enable individuals to showcase their work history, achievements, and professional certificates, facilitating the hiring process.
  3. Health Records: Soulbound tokens can streamline the transfer of medical records between healthcare providers, simplifying the patient experience.
  4. Driver's Licenses and Lending Credit: Soulbound tokens can be used for issuing digital driver's licenses and representing lending credit.
  5. NFT Trading and Governance: Soulbound tokens can filter out counterfeit NFT collections and enhance governance mechanisms in decentralized finance (DeFi) protocols.

Future Prospects and Recovery Mechanisms

While Soulbound tokens are still in the conceptual stage, the development of early use cases is expected in the near future. Proposed recovery mechanisms, such as community recovery, provide solutions for recovering lost Souls and associated SBTs by leveraging the support of community members.


Soulbound tokens represent a paradigm shift in the world of NFTs, elevating their purpose beyond mere ownership and monetary value. By establishing a verifiable digital identity and reputation system, SBTs have the potential to revolutionize various industries, including education, employment, healthcare, and governance within a decentralized framework.