What Are Soul Bound Tokens (SBTs)?

Many tokens are present in the limelight & one such token that has gained popularity recently is the Soulbound Token or commonly referred to as SBT.
Siddhartha D.
1:21 27th Feb, 2023

Let’s dice deep with the idea behind SBTs, their potential uses and connection to Ethereum and Vitalik Buterin.

So, before getting started we need to have a good understanding of what SBT tokens are.

Soulbound Tokens Explained:

Soulbound Tokens are a specific kind of currency which are strongly linked to a particular individual or object on the blockchain. The reason they are known as "Soulbound" is because they're designed to be forever bound to their owner, just as a soul is bound to a body.

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In other terms, once a token is created, it's unable to be exchanged or transferred to another party. The only person able to utilize the token is its real owner, i.e. if you get yourself a token created you will have its access lifetime and you can’t readily get rid of that access.

The Smart contracts, which are essentially self-executing software programs that constantly follow the token's rules, are utilized to generate SBT tokens on the Ethereum blockchain and are quite important for it. These contracts could be designed to set limitations regarding how a token can be utilized, such as allowing it to be used only rarely or for a short period. This must have given you an understanding of what these Soulbound tokens mean. So, moving forward let us take a look over the uses of SBTs for a better understanding.

Uses of Soulbound Tokens:

  • Digital art and collectibles could be one use for SBTs in this field. Artists can make sure that their work remains original and cannot be reproduced or duplicated by producing a Soulbound Token that's also connected to a specific piece of digital art. Both these digital assets, such as video and audio files, may belong to this category and can be helpful in terms of copyright labels.
  • Gaming is yet another industry wherein SBTs are placed to use. Game developers can make sure that goods cannot be copied or exchanged on black markets by creating Soulbound Tokens which are linked to in-game objects or currencies. Providing a comparable opportunity for all players by providing transparent in-good services and preventing fraud are also advantages of this token.
  • SBTs can be utilized for proof of identity or verification purposes as well. Companies may make sure that only users have access to service products or information by linking a token with such a specific user. In industries such as banking where safety and confidentiality are top priorities, this may prove extremely helpful.
Soul Bound Tokens

You must now have a clearer understanding of all how Soulbound Tokens can be used and where they can be utilized after reading about the aforementioned domains of application. People frequently inquire about the procedure involved in creating these tokens specifically for each individual and how it works. Let's use Ethereum to learn more about how it was created.

Soulbound Tokens And Ethereum:

Smart contracts as discussed above are used here on the Ethereum blockchain, developed by Vitalik Buterin in 2015, to generate SBTs.

The creation of these smart contracts and decentralized applications is made possible by the decentralized Ethereum platform (DApps). By market capitalization, it has become the second-largest cryptocurrency, after Bitcoin.

There are also numerous advantages to the use of Ethereum to generate SBTs. Let’s take a look into that-

  • The Ethereum blockchain is a reputable platform with a large development community as well as a rich ecosystem of tools and resources.
  • It also enables the development and installation of SBTs easier compared to using a much less developed network.

As well as the SBT consumption could be governed by complex rules and conditions due to Bitcoin and Ethereum smart contract features which could help us in guaranteeing that SBTs are employed in line with the objectives of their creators and in a secure and monitored way.

SBTs aren't regulated by any centralized organization or government owing to Ethereum's decentralization. This improves their resilience to restriction and exploitation and ensures everyone who has internet access could use them.

You must now be aware of the rationale for the selection of Ethereum and smart contracts as the foundational elements for these SBTs. Let's look at the history of SBTs and the motivations of their creators as we move forward.

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Soulbound Tokens and Vitalik Buterin:

One of the most significant figures in the blockchain space, Vitalik Buterin is the co-founder of Ethereum. He presented an excellent argument again for use of blockchain technology concerning the creation of a more democratic and decentralized world.

Vitalik Buterin Wikipedia

The possibility of SBTs has indeed been addressed by Buterin, stating that "Soulbound Tokens could potentially establish an entirely novel sort of digital ownership, wherein users retain full control of their resources and can guarantee that they're not replicated or pirated."

Because of this, the creation of these tokens allowed him to realize his entire concept, which made a more significant contribution to the decentralized token economy.


To assure the legitimacy and originality of digital assets in the gaming market, soulbound tokens provide a novel solution. They provide more protection and integrity for the ownership and trading of rare in-game objects by users.

They also present fresh chances for game designers to make money off of their creations and give players more for their money. In general, soulbound tokens are a promising sign for the future of digital asset ownership and online gaming.