The world’s largest crypto exchange – Binance – has announced that it is ready to issue Binance Account Bound (BAB), the first Soulbound Token (SBT) created on the BNB Smart Chain. BAB will initially be introduced as a pilot project and will only be accessible through the Binance mobile app.
It will be an optional feature that will only allow those Binance users who are Know-your-customer (KYC) compliant to cut their BAB directly to their wallet while using the platform.
BAB has essentially been introduced to act as an online identifier for Binance. It can also be leveraged by third-party protocols to validate BAB tokens for a myriad of activities, such as avoiding bots, rejecting NFTs, and using the DAO for square voting, etc.
Representation beyond monetary amounts
According to the official suspension, the BAB token is the first Soulbound Token issued on the BNB Smart Chain that focuses on addressing identity issues in the decentralized society. It is a non-transferable and non-financial token. The announcement notes that “portability” may not be in the best interest of decentralization. It can be problematic in terms of the distribution of governing power.
As such, BAB is different from traditional assets like Bitcoin and Ethereum, which represent instantaneous amounts.
“As we begin to explore how credentials will work on Web3, whether it’s a verifiable skill set or an earned title, further use cases for the BAB token will emerge. This sense of accountability paves the way for a more effective decentralized community and space.”
Binance expects additional use cases for BAB to emerge in the future as the web3 landscape evolves.
The concept of SBT was first introduced by Ethereum founder Vitalik Buterin along with E. Glen Weyl and Puja Ohlhaver. Earlier this year, Buterin explained the disadvantages of portability and commercial viability of NFTs;
Soulbound is a new type of token standard that could potentially be a key building block for the Decentralized Society or DeSoc. In the paper, Buterin explained the many ways SBTs could be used, from university degrees to education certificates and as web3 credit scores.
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