Some years ago, as an April Fool, a firm offered a free download of a game as long as, in the terms and conditions, you agreed that they could now own your soul. It was silly, but most people agreed to the download with that condition, because they don’t read the terms and conditions. Luckily it was a joke. But now you can sell your soul to be on the network. Soul-based tokens (SBTs) to be clear.
What are soul-based tokens?
They are tokens proposed by Microsoft, Flashbots and Vitalik Buterin, the creator of Ethereum. These proponents of smart contracts and blockchain released a white paper Finding Web3’s Soul, promoting the idea of SBTs. Here’s the abstract summary of their joint idea:
Web3 today centers around expressing transferable, financialized assets, rather than encoding social relationships of trust. Yet many core economic activities—such as uncollateralized lending and building personal brands—are built on persistent, non-transferable relationships. In this paper, we illustrate how non-transferable “soulbound” tokens (SBTs) representing the commitments, credentials, and affiliations of “Souls” can encode the trust networks of the real economy to establish provenance and reputation. More importantly, SBTs enable other applications of increasing ambition, such as community wallet recovery, sybil-resistant governance, mechanisms for decentralization, and novel markets with decomposable, shared rights. We call this richer, pluralistic ecosystem “Decentralized Society” (DeSoc)—a co-determined sociality, where Souls and communities come together bottom-up, as emergent properties of each other to co-create plural network goods and intelligences, at a range of scales. Key to this sociality is decomposable property rights and enhanced governance mechanisms—such as quadratic funding discounted by correlation scores—that reward trust and cooperation while protecting networks from capture, extraction, and domination. With such augmented sociality, web3 can eschew today’s hyper-financialization in favor of a more transformative, pluralist future of increasing returns across social distance.
I could share the whole paper here, but recommend you read it and will summarise that the idea is every moment of your life, digitally, is captured and recorded to your token. As a result, your token has everything that has ever happened in your life, from birth to death, womb to tomb, sperm to burn, egg to dead.
OK, maybe I’ve over-stated the concept there but it’s not far off. Everything you ever bought, everything you ever did, everything you ever do, is recorded on a smart blockchain network and affiliated with you. It’s your digital soul. It’s your soul-based token.
The 36-page paper goes on to talk about other souls verifying your soul.
I must admit, I found it scary. The very mention of soul raises spectres. I don’t want my soul to be stored as a token on the internet. As The Defiant explains:
“Soulbound Tokens” is not an ideal name to attract new users to NFTs and web3 as it is derived from nerdy World of Warcraft while also signaling religious affiliation. Danielle Lauren suggested “Infinity Tokens” on twitter. This author suggests “Forever Tokens.”
But then, maybe they just called it the wrong thing. It’s a digital identity. It’s not your soul. The real idea is a digital identification of who you are, and whether you are bona fide.
The benefits of such a system is the same as with any other digital identity. It’s a proof that we can trust you. Add on to this that, like all smart contracts and blockchain-based systems, your identity can be proven through the network, and it creates a basis of trust for Web3.
That’s the idea anyway.
p.s. I’ve got soul but I’m not a soldier
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...