In the current crypto market, the crucial factors that are considered by all crypto users are reputation and trustability. Every user analyzes the history of the token or coin before investing in it. Hence, to give more identity and particular ownership to the cryptocurrencies, Ethereum’s co-founder planned for the initiation of soulbound tokens. If any tokens are issued as “soulbound items”, then they’ll act as an e-certificate which builds the reputation of the token receiver.
Also, the soulbound token holder can help attract multiple investors for their other crypto projects. Additionally, these tokens can be accessed on any decentralized platform like DeFi, Metaverse, etc. In the future, even the identity of the token holder can also be found with these soulbound tokens. Thus it is believed that soulbound tokens will also act as a golden key in building the reliability of the cryptocurrencies. Now, you’ll be enthusiastic to know more about soulbound tokens.
This article will cover everything about Soulbound tokens, their working, and all regarding soulbound token development. Without any delay, let us kick off this article with…
What are Soulbound Tokens?
The idea behind Soulbound tokens was initiated by Ethereum’s cofounder Vitalik Buterin, inspired by the soulbound items of the popular game “World of Warcraft”. Here, tokens will be issued by the gaming platform where only the player can hold the token. Those tokens issued cannot be sent or sold to anyone. The main motto behind these tokens’ idea is to encourage the reputed user or the best one in the particular platform. These tokens are not created for money-generating purposes but the token holder can earn good fame in the crypto ecosystem.
Soulbound tokens are also referred to as non-transferable NFTs as they are not created by anyone but issued for the right person by any of the platforms. Hence, these tokens hold a unique identity of a person, entity, data, etc.
To be precise, a collectible once minted as a soulbound token cannot be shifted from your wallet. In that sense, the soul represents your private wallet tied to a blockchain network. Soulbound tokens can also be considered as digital CVs which are self-certified and have a sole identity.
Knowing these tokens, you might be exclaimed to know the work behind Soulbound tokens. They are included below.
Working Process of Soulbound Tokens
Till now, there are no peculiar token standards or protocols released for creating soulbound tokens as per Buterin’s whitepaper. These tokens don’t come under ERC721 and ERC1155 standards for NFT creation. As these tokens are issued as a token of honor by a community, these tokens cannot be created as per the individual’s needs. For instance, let us consider a popular gaming platform, there will be more than 1000 levels and the player has to cross each level to qualify for the next one. If any extraordinary player crosses multiple levels at a greater speed, then he/she be considered the Winner. If the gaming platform issues the winner’s award as a soulbound token, it will help to build the reputation of an eligible player.
In that sense, every token issued by the platform represents a single soul. There is no restriction that a person should hold a single soul. Any person can hold multiple souls as each represents different entities like digital CVs, certificates, licenses, rewards, etc. With this, we shall explore the perks obtained by the entrepreneurs who tend to create Soulbound tokens.
Benefits of Soulbound Token Development
- Soulbound tokens help maintain the authenticity of the assets. Hence, digital verification and documentation are made easy with these soulbound token developments.
- These tokens are non-transferrable so complete ownership will be held in the hands of token creators.
- With Soulbound tokens, you can access all decentralized platforms like Defi exchanges and NFT marketplaces.
- It improved the voting procedure in all DAOs (Decentralized Autonomous Organizations)
- These tokens help in finding anyone’s identity on Metaverse platforms.
Potential Use Cases of Soulbound Tokens in the Web3 Ecosystem
There are various real-time applications available by accessing Soulbound tokens in the Web3 ecosystem.
NFT Trading
Soulbound tokens play a major role in influencing NFT trading as they have greater prominence than non-fungible tokens. Hence, reputed artists work to get rewarded with soulbound tokens. By holding a soulbound token, one can earn more trust among investors. For instance, if an artist is certified with a soulbound token, their reputation gets enriched in the crypto marketplace. Considering this, the other NFTs created by that particular artist can also be easily sold. To be precise, SBT holders will be the most preferred of all the crypto-based platforms.
Governance
Every Defi platform gifts its tokens as rewards for new users to engage them in their platform’s activities and for their popularity. These tokens also offer users voting rights. But in the later stages, many reputed cryptopreneurs tried to get voting rights and become influencers just by buying the tokens from the early users. They are even spending millions to get that pride in the platforms. This might lead to the mishandling of ownership. To avoid this crisis, soulbound tokens can be issued for the early users that will offer them authenticated governance and authority.
Education
Every educational institution will issue a certificate for a qualified graduate once their degree is completed. But in the decentralized crypto ecosystem, certificates can be issued as souls, and students on the other end will also be the receiving souls. In this case, every degree holder’s data will be stored and authenticated in the blockchain. Thus, any sort of malicious activities and mismanagement of educational data can be avoided.
Healthcare
In the current era, the medical sector is growing at its peak as diseases are found everywhere. Reports of each patient have to be maintained and secured in a printed format. In cases of new checkups, reports have to be attached properly. On the other side, if the patient’s report is converted into a soulbound token, any data cannot be missed or altered. Paperwork for preparing reports is avoided and maintenance will be perfect to its edge in Soulbound token development.
Not only these but Soulbound tokens can also be used as:
- Digital ID cards for memberships
- Managing attendance and maintaining records similar to the Proof of Attendance mechanism
- Lost private keys can be easily recovered with Soulbound tokens
- Used for maintaining the Defi transactions and lending history
On considering the benefits and use cases of Soulbound token development, many reputed artists are more interested in creating SBTs for their crypto-based platforms. If you’re based on such a community willing to create your soulbound token, then you might be interested to know its development cost at first. Here comes the following.
Cost to create Soulbound Tokens
While speaking of its cost, we just cannot provide you with the exact cost as it is influenced by multiple factors. Those factors might include,
- The complexity of your collectible
- Design of your project
- Size of the development team
- Token standard and blockchain
- Working charges
Based on these factors, the cost to develop your Soulbound token alters. But we can show you the approximate cost and it might start at $8000. By approaching a renowned Crypto Token Development Company like Icoclone, you can create your tokens in a cost-efficient and scalable manner.
Future of Soulbound Tokens
As per the analysis, Soulbound tokens will not completely take over the non-fungible tokens but will act as the greatest symbiotic alternative in the future. SBTs will act as unique non-fungible tokens where a new artist will be interested in Soulbound token development. By bringing, the NFTs to the next level, soulbound tokens will bring vibrancy and faith worthiness to the people.
Hence for effective soulbound token development, you may seek the help of a reputed token development company in the crypto space. There are various SBT development companies prevailing, but you’ll pick the best among the amateurs. In that regard, Icoclone always stands first.
Why Choose Icoclone for Creating Soulbound Tokens?
The above-discussed is crucial information regarding soulbound tokens. Currently, soulbound tokens are the buzzing term in the crypto space and many decentralized crypto platforms are interested in creating one. In that sense, as a newly emerging startup, to make a great identity in the crypto space, you should create a crypto token first. To create a feature-rich token, you can approach a reputed crypto token development company like Icoclone for more results.
Icoclone not only excels in offering crypto token development but also in Metaverse Token Development, fungible token creation, NFT development, etc. We also offer premium ICO and STO scripts for budding entrepreneurs who wish to initiate a crypto business using crypto crowdfunding. Hence, get in contact with Icoclone to create a unique crypto token outstandingly. Initiate your crypto token creation and drive your crypto business to the next level!