The crypto exchange launched its first non-transferable and non-financial bound token, Binance Account Bound (BAB).
Binance’s new KYC efforts
Crypto exchange Binance will step up its identity verification efforts with the BAB Soulbound Token, which is based on the company’s native build and build (BNB) chain. The token will act as a decentralized solution to the exchange’s KYC requirements. Possession of a BAB token will verify a user’s status on the exchange. It would also facilitate some third-party protocols. Therefore, as of now, BAB ownership is available for customers who want to go the SBT route for their KYC verification as an option on the Binance mobile app. Once Binance’s KYC process confirms a user’s identity, they can directly mint the token into their digital wallets. Customers who want to stick to the more traditional KYC paths can still opt for it. As of now, holding a BAB token just indicates KYC check. However, Binance may increase its features and use cases in the future.
SBT as NFT
A new Web3 concept introduced earlier this year, Soulbound tokens like BAB, are basically non-transferable NFTs. Since these tokens cannot be transferred, traded or sold, they work perfectly as a wallet identifier as each one is unique to that particular wallet holder on the blockchain. In addition, Soulbound NFT can also store some data about wallet activities, such as interaction with a dApp or smart contract.
Binance CEO Changepeng Zhao (CZ) spoke about the decision to launch SBT, saying:
“Soulbound Tokens will play an important role in how web3 credentials will work in a Decentralized Society… We foresee many use cases for the BAB token and will actively work with the community to develop this revolutionary vision of decentralized society.”
Unlocking the “Utility”
BAB will be the first soulbound token to be released on the BNB chain. The industry has talked about pushing all the hype around NFTs and finding more constructive and long-term use cases. The NFT community is coming to terms with the need to reveal a true value proposition for non-tradables. Is Soulbound Token the solution to this requirement? It looks like the Binance team thinks so. The exchange has recently had a series of successes and has delved into alternative symbolic use in space.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial or other advice.